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The most important – and difficult – action that new portfolio company CEOs must take

 


The PE Hub Network | February 19, 2019



The PE Hub article, "The most important – and difficult – action that new portfolio company CEOs must take," was co-authored by Russell Reynolds Associates Consultant Jeffrey Warren, in which he emphasizes the importance for new PE-backed CEOs to evaluate their executive team and make the necessary changes early on. The article is excerpted below.

New CEOs often come into portfolio companies with guns blazing, ready to change the world. But here’s one thing they typically don’t do fast enough: fire people.

We recently interviewed 25 leaders at premier private equity firms in the U.S. and Europe, including Bain Capital, Carlyle Group and KKR, as well as 15 successful portfolio-company CEOs.

When we asked about the most important actions CEOs should take within their first six months, 97 percent cited “assessing and upgrading the executive team” as the top priority, ahead of executing strategy and communicating the vision.

Yet in practice, first-time CEOs nearly always linger over assessments of top players, reluctant to lose their institutional knowledge and the goodwill associated with retaining them.

To read the full article, click here.

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The most important – and difficult – action that new portfolio company CEOs must take