Making the Leap from Corporate Leader to PE-Backed CEO

Idea in Brief The Problem Private-equity firms increasingly hire corporate veterans to run their portfolio companies, but many of those leaders struggle because PE investors demand immediate value creation, lean operations, and relentless accountability—which makes the role quite different from most corporate ones. The Solution Success depends on five traits: commercial focus; the ability to tackle strategy under pressure; the ability to gain influence; risk tolerance; and interpersonal range. Firms and candidates must rigorously assess readiness for this faster, higher-stakes context. The Payoff A clear understanding of the required capabilities and motivation will expand the CEO talent pool and increase the odds of faster execution, stronger investor trust, and superior returns. For years a common assumption has guided hiring decisions across private equity: When in doubt about whom to hire to run a portfolio company, choose somebody who’s been the CEO of a PE-backed venture before. But times are changing. Today, in the face of talent shortages, bolder value-creation plans, and increasingly complex transformations, PE firms are looking beyond that familiar profile. At ghSmart we’ve observed this shift firsthand. In recent years our PE clients have increasingly recruited leaders from corporate talent pools, and more corporate C-suite executives now view PE-backed firms as a compelling pathway to their first CEO role. That trend has been fueled by the rapid growth in the number of PE-owned businesses and the resulting supply-demand imbalance for CEOs with experience running them. According to Citizens Bank, the number of U.S. PE-backed companies has increased by more than 400% over the past 25 years, while the number of publicly listed companies has declined by roughly 35%. Our own data reflects that dynamic: Fifty-three percent of the high-performing first-time portfolio-company CEOs we assessed in 2024 and 2025 came directly from the corporate C-suite or business-unit leadership roles, highlighting how central the corporate pipeline has become to meeting PE firms’ growing demand for talent. Clearly, not every accomplished corporate leader will be well suited for a CEO role at a PE-backed firm. So what are the keys to success? To answer that question, we analyzed five years of proprietary assessment data for 491 senior executives (241 portfolio-company CEOs and 250 corporate C-suite leaders), evaluating differences across 18 leadership traits. We also reviewed 83 assessments of corporate leaders who later became CEOs at PE-backed firms and conducted a dozen interviews with CEOs and investors. In doing so, we identified five capabilities that are consistent predictors of success, each of which we’ll discuss in this article. The Five Crucial Capabilities Our five capabilities reflect the specific demands of operating in a private-equity context, where resources are leaner than they are in the corporate world and accountability is direct and unrelenting. They offer a more reliable and practical way of assessing leaders’ potential to succeed in a PE-backed business than simply considering their prior portfolio-company experience. People are unlikely to excel at all five capabilities, but the better they do across the board, the greater the odds are that they’ll succeed at a PE-backed firm. Practical commercial orientation. Corporate executives often are great at long-range planning, but CEOs of PE-owned companies are under immediate pressure to translate strategy into value creation. Those who succeed understand what will move the needle and adjust a firm’s direction quickly as data comes in. In our research, CEOs of PE-backed firms were 17% more likely than corporate C-suite leaders to excel at the commercial side of the business, focusing on and pulling the levers that increase revenue. As Robert Hanson, a two-time portfolio-company CEO, told us, “The biggest adjustment in PE is trusting that it really is all about the value-creation plan, not about appeasing stakeholders.” Because the clock starts on day one, CEOs are expected to move beyond financial oversight and into active commercial leadership. “If you’re hired as a category expert from corporate,” Hanson explained, “you’re not there just to manage the annual budget. You’re expected to create value in that category by driving consistent strategic growth and margin expansion.” Ability to tackle strategy under pressure. Corporate leaders often craft strategy in long planning cycles that involve heavy governance and extensive stakeholder alignment, but portfolio-company CEOs are under constant time pressure. “You can’t succeed in PE by setting strategy from a distance,” one of them told us. “You have to be hands-on, getting into the fray and translating direction into action.” In our analysis, CEOs of PE-backed firms were 20% more likely than corporate C-suite leaders to make strategic thinking a priority. For leaders who move into PE-backed roles, the absence of quarterly earnings constraints and of the need to build broad consensus for decisions can feel liberating. “In PE,” we were told by Jesper Nordengaard, a first-time portfolio-company CEO who’d previously served as Colgate-Palmolive’s North American president, “you make a decision, and the next meeting is about how you’re implementing it.” Ability to wield influence widely to create impact. In corporate environments leaders often rely on established teams, infrastructure, and influence pathways to produce results. Relationships and credibility cultivated over years in a corporate hierarchy matter far less in a PE portfolio company, where new ownership and board members, a reset strategy, and limited inherited authority mean leaders must know how to quickly earn stakeholders’ confidence. “You’re effectively starting over,” one portfolio-company CEO told us. CEOs of PE-backed ventures often need to exert direct and indirect influence across a large range of stakeholders—from direct reports to people in the broader organization to board members—in order to achieve the alignment that enables execution. They must systematically mobilize the organization toward faster decisions and tangible results with an intense, deliberate presence. That means spending significant time in the field, working one-on-one with leaders and engaging with their teams and frontline employees. New CEOs need to stay close enough to the work to test assumptions and remove blockers while deliberately pushing accountability for results down and across the organization. As Eric Jungbluth, a CEO who has led multiple PE-backed firms and previously had leadership roles at three public companies, told us, one thing matters above all else: “How well you drive execution through others.” Willingness to take risk. In our analysis, portfolio-company CEOs were 12% more likely to score high on risk-taking than corporate C-suite leaders were. Leaders who thrive in PE-backed firms don’t wait for consensus or perfect information; they place selective bets, make trade-offs quickly, and own the consequences transparently. Leaders who’ve sought out disruptive or transformational roles in the corporate world often are already conditioned to take meaningful risks without certainty. Consider staffing decisions. In the corporate world it can take many months to hire senior executives and get them up to speed, but PE firms demand that CEOs make rapid calls about who can deliver on the value-creation plan and who cannot—decisions that carry greater risk because the timeline to create value is shorter and the margin for hiring mistakes is smaller. Portfolio-company CEOs have to home in on the seasoned functional experts who they believe can perform immediately and who need minimal onboarding. They must take calculated risks by selecting leaders who can help the business reach its next stage, even when the exact capabilities required are still coming into focus. As Maggie van de Griend, the managing director for portfolio talent at Warburg Pincus, told us, “In private equity you’re hiring for where the business needs to be two years from now, not where it is today.” Interpersonal range. Corporate environments often demand polish, an understanding of hierarchy, and an ability to carefully manage communication. PE environments, on the other hand, demand clarity, candor, and the ability to work well with a wide variety of people. They require leaders who can quickly grasp people’s motivations, understand how their own styles and decisions affect others, and adapt their approaches to galvanize people and resolve conflict when it arises. The portfolio-company CEOs we interviewed put a particular emphasis on building strong working relationships with their investors and boards, which requires frequent, informal, and unscripted interactions. They often described it as one of the most meaningful differences from corporate roles, where board interactions tend to be more formal, episodic, and filtered. Greg Gartland was struck by this difference when he began working as the CEO of 3E, a PE-owned provider of data-driven intelligent compliance solutions in the environmental, health, safety, and sustainability space, after serving as the chief product officer at S&P Global Market Intelligence. “I was involved in nearly every S&P board meeting for three years,” he told us, “but only on specific topics for short windows. In PE, I’m on the phone with the board every day.” What Success Looks Like Consider the case of Lisa Utzschneider, whose transition from corporate C-suite executive to CEO of a PE-backed company highlights three of the key predictors of success: a practical commercial orientation, the ability to achieve broader influence and impact, and interpersonal range. Utzschneider worked for more than two decades in senior leadership at Microsoft and Amazon and then became the chief revenue officer at Yahoo, where she helped stabilize the business and played a central role in its sale to Verizon. Having navigated a complex turnaround and transaction, she wanted a new challenge. So she became the CEO of the PE-backed Integral Ad Science (IAS). Once at the helm, Utzschneider drew immediately on the operational intensity and commercial rigor she had honed in her corporate roles. “Amazon and Yahoo really groomed me for the PE CEO role,” she told us. She reinforced value creation from day one, made fast, pragmatic calls, and built a relationship marked by high candor and trust with her investors. Her ability to engage them as true partners allowed her to gain their confidence quickly and operate with speed and transparency. Sébastien Plassard To increase momentum and focus her team directly on commercial objectives, Utzschneider continually surfaced what she calls the “big rocks” at weekly meetings—that is, the company’s most critical efforts, tied to both individual C-suite leaders and the pillars of IAS’s value-creation plan. She also tapped into the PE firm’s CEO network for advice. “If I’d never hired a CTO before,” she recalled, “I’d ask a CEO who had done it. If someone had done seven acquisitions in two years, I’d find them and ask exactly how they pulled it off.” Utzschneider leveraged the PE ecosystem and its existing playbooks, which allowed her to move faster than she could have moved alone and to influence her organization more broadly and impactfully. Under her leadership, IAS grew significantly and went public. Reflecting on what enabled her success, Utzschneider told us, “In PE, success depends on the return, the working hypothesis, and the exit expectations. It’s a transaction, and clarity on your role is what builds trust, empowers teams, enables speed, and creates value.” Ken Gayer, a corporate-groomed leader who has now served as the CEO of several PE-backed ventures, is a good example of someone whose interpersonal range and practical commercial orientation have contributed to his success. Before working at firms owned by private equity, Gayer spent 15 years at Honeywell, ultimately becoming the business president of Honeywell Specialty Products. Earlier, he had served as a lieutenant in the U.S. Navy’s nuclear submarine force, an environment defined by precision, hierarchy, and strict boundaries, and as a manager at McKinsey & Company, where he sharpened his problem-solving and communication skills. Those experiences shaped him into a disciplined operator and a highly effective “corporate soldier,” but they also reinforced relationship norms concerning distance, structure, and formality. His first role at a PE-owned firm challenged those norms right away. When Gayer became its CEO, the company’s founder remained the chief technology officer and the emotional center of the business—an arrangement that required Gayer to balance respect for the founder and the company’s origins with the need to professionalize and grow it. A key early success came from his practical commercial orientation; he was able to successfully translate the founder’s vision into actionable, economics-driven plans, for instance, by driving growth through acquisitions. “I was good at analyzing and presenting things in a way that made it easy for the private-equity investor to say, ‘That’s actionable. We can help you with that.’” Gayer discovered that many of the interpersonal norms that had served him well in his corporate roles were in fact counterproductive in a PE-backed business. “At a corporation,” he told us, “once you got past your immediate boss, the next level up became distant. There was often an antifraternization mentality.” In PE the opposite held true. Success depended on being visible, approachable, and directly engaged at every level of the organization. So Gayer leaned in. At one portfolio company, when he encountered a lack of the kind of basic infrastructure that’s taken for granted in the corporate world, such as a technology system for running virtual meetings and a standard template for nondisclosure agreements, he didn’t wait for it to be built around him. Instead, he adopted what he called a “zero-to-infinity mindset,” stepping in proactively to solve problems and create operating mechanisms that allowed others to move faster. Utzschneider and Gayer’s experiences both illustrate a consistent finding in our research: Corporate leaders who succeed in PE are those who can translate commercial insight into action, galvanize results across the system, and use their interpersonal abilities to meet the demands of a far riskier, fast-moving environment. . . . As the pathway from corporate leader to CEO of a PE-owned company becomes more common, success will hinge on a shared understanding of what the role truly requires. When a leader fails to make the transition well, it’s rarely because of a lack of talent; instead, it’s because the capabilities required were never fully understood or tested on either side. The CEO role is fundamentally distinct in PE-backed enterprises. Investors must move beyond scouting for candidates with familiar résumés and track records and ask more-precise questions about readiness for this environment. Corporate leaders, in turn, must view the transition not just as a promotion but also as a redefinition of expectations—and seriously consider whether they are built for, and motivated by, the realities of the role. Getting it right starts with clarity about both capability and motivation. Questions to Ask By focusing on the predictors of CEO success that matter in private-equity-backed businesses, PE firms can expand the leadership candidate pool, and corporate executives can more honestly assess whether they’re prepared to make the leap into running a PE-owned venture. To help with that process, we’ve devised a set of questions that PE firms and corporate candidates should ask. What Firms Should Ask About Candidates Do they have a bias for action anchored in what will practically create value? When have they made high-stakes decisions without perfect data, and how did those decisions translate into commercial outcomes? Can they quickly simplify strategy into a small set of executable priorities? How well do they pivot when new data emerges? Have they taken meaningful risks, especially on talent? How quickly have they assessed, upgraded, or replaced leaders when the business demanded it? What other consequential bets have they made where they were fully accountable for results? How well do they deliver results through others? Can they empower a team to execute at a rapid pace and on a large scale? Do they take pride in collective outcomes, or do they overindex on “I” rather than “we”? Do they build trust across diverse stakeholders? Are they comfortable communicating with candor, adjusting their style to the context, and engaging in productive conflict? What exposure have they had to scrappier environments? Have they led—and gotten results—in settings without deep infrastructure, large teams, or established playbooks? Have they stepped into messy or broken situations where they were required to stabilize or rebuild a business? What motivates them to take on this role? Beyond the compensation upside, are they energized by building, problem-solving, and operating with sustained intensity? Is there evidence that they will “have fun through the grind,” as one CEO put it? What Candidates Should Ask Themselves Am I energized by making fast, bottom-line-driven decisions amid ambiguity? How well do I understand—and buy into—the commercial drivers behind the value-creation plan? Do I quickly cut through what’s interesting to focus on what matters? Or do I prefer having time for extended exploration and refinement? Does the idea of having greater accountability and ownership energize or drain me? Am I ready to be the primary source of clarity, conviction, and momentum, or do I prefer to share responsibility with others? Am I prepared to take significant risks? Will I feel confident having a talent plan within the first 120 days and making changes within a year? Am I comfortable leading with real-time transparency? Will a high-candor environment, where the good, the bad, and the ugly are brought to the surface early and often, play to my strengths or clash with my style? Do I enjoy the building process? Am I energized by finding out what I don’t know, fixing what’s broken, and creating structure where little exists, or do I prefer to have established teams, processes, and support systems in place? What do I really want in my next role? Am I more motivated by the work, the compensation, or the idea of being the CEO? How will I feel on the hardest days of the hold period?

Making the Leap from Corporate Leader to PE-Backed CEO

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