How Great CEO’s Create Value: Lessons from Private Equity

Top private equity firms have been long recognized for their value generating capabilities. One reason for private equity’s success is its ability to improve the operations of companies. This presentation focuses on the key drivers of growth and success, including the competencies, activities and mindsets of great CEO’s.

These insights come from researching and/or directly working with over 125 companies from a top private equity firm over the past decade, which serves as a wonderful laboratory to understand the key levers of growth across companies and industries. They also incorporate lessons from my additional twenty years working inside public companies to develop leaders and organizations.

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For large growth goals, it is imperative to make swift and broad changes. Ambitious goals cannot be achieved through piecemeal execution, and changes are most powerful when they are made in concert and are aligned with the organization’s strategy, goals and objectives.

The first year of embarking on a large growth or change initiative is also crucial. This is when you set the foundation and build momentum. It is important to take immediate action at the first sign of trouble, especially if you have an aggressive timeline. Once you get off the rails, it’s almost too late. It is also important to boost performance continuously, as the enemy of great is good.

We have also observed that leaders matter. Having the right CEO and key talent is critical to success. For aggressive growth goals in a short time period, CEO’s must have the right experience to execute upon the strategy quickly. Great CEO’s also hold key leadership competencies, engage in specific activities, and have powerful mindsets, which underlie how they view, manage and learn from their experiences.

In terms of the key leadership competencies, great CEO’s know how to bring out the best in others. Leading others effectively is rooted in leading oneself effectively, which begins with self-awareness. Related to great leadership is an understanding of how to coach employees with real-time feedback and support, and how to skillfully communicate not only to one’s direct reports but also to all levels of the organization in a clear, mission-driven way. In addition to possessing great leadership competencies, successful CEO’s are very strategic and have great analytical problem-solving skills. They then utilize this analysis to deliver measurable outcomes, while managing their time efficiently in the process.

In terms of the right activities, great CEO’s focus on the key people, projects and units to the company’s value creating initiatives. Successful CEO’s do not hesitate to act decisively and make the tough decisions when needed. They also ensure that the key people and entire organization are aligned around the strategy, goals and objectives of the company.

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In addition to experiences, competencies and activities, great leaders have powerful mindsets – which provide the most leverage out of all the leader attributes. The mindset (mental model/worldview) is an opportunity to develop resilience and continuous learning. Someone with a growth mindset, an open mindset, and an abundance mindset is able to glean the most information, find the best opportunities available, and optimize multiple levers concurrently.

Arcadia Group helps leaders engage in the key activities and develop the necessary competencies and powerful mindsets for growth. Our integrative approach combines holistic and pragmatic approaches to develop excellence in leaders, and to align an organization and culture around value-creating initiatives. They services deployed are dependent on your needs, and they may include consulting, executive search and talent solutions, coaching, programs, conferences and/or events.

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