Private equity ownership can reshape a company overnight – and for many CEOs the transition becomes a defining moment in their leadership journey. With expectations rising and timelines accelerating, leaders must adapt quickly or risk being replaced. Leo Cummings, an associate at Hunt Scanlon Ventures, examines Bain & Company’s perspective on what happens when private equity takes charge – and what it means for talent strategy.
In a recent report, Bain & Company highlights a number that immediately changes the temperature in the room: private equity owners replace 50% to 70% of portfolio company CEOs during the hold period.
It is a stark reminder of how demanding the PE ownership model can be for leaders unfamiliar with the speed and discipline private equity expects.
Sponsors bring capital, focus, and clarity of purpose – but they also bring urgency. They measure leadership through the lens of value creation, operational tempo, and alignment with the investment thesis.
For many CEOs, the transition requires a mindset shift far beyond traditional corporate governance.
The executives who outperform do so by embracing transparency, clarifying priorities, and aligning quickly with their new owners. Bain notes that the ability to increase organizational “metabolism” often determines whether a CEO remains in the role – or becomes part of the majority who are replaced.
Align Early, or Fall Behind
Bain stresses that the first months of PE ownership hinge on building an integrated, actionable value-creation plan. CEOs must quickly synthesize the investment thesis, identify the three to five levers that matter most, and align investors and management around a shared execution roadmap.
“Great CEOs ground the investment thesis in data and turn it into an execution playbook.”
The CEOs who succeed anchor the discussion in data and define KPIs that signal progress in real time.
Equally important, they ensure these priorities dominate the board agenda and that resources flow to the areas that move enterprise value. Drift, Bain warns, is the enemy.
“This is where great CEOs separate themselves – by grounding the investment thesis in data and turning it into an execution playbook,” said Leo Cummings, an associate at Hunt Scanlon Ventures.
He said that early alignment prevents misunderstandings and gives sponsors confidence in the leadership team’s ability to move quickly.
Transparency Wins Every Time
The quickest way for a CEO to erode trust is to go silent or manage communication defensively.
Bain emphasizes that sponsors expect candor, speed, and proactive updates – especially when challenges emerge. Open information flow builds credibility, while surprises create skepticism.
“Value creation in private equity is ultimately a leadership story – and the right leader can change the trajectory of a company’s entire investment cycle.”
Effective CEOs set a consistent communication rhythm and gauge how frequently their sponsor wants updates. They address risks head-on, provide context for performance trends, and always come with proposed solutions when sharing bad news. This practice reframes communication as partnership rather than reporting.
“PE firms expect honesty, not perfection. CEOs who communicate issues early – and frame them with options – earn the trust that ultimately extends their runway,” said Mr. Cummings.
Operate With Precision and Upgrade Talent Fast
Private equity ownership raises the operational bar. Bain urges leaders to define responsibilities early, build a KPI dashboard aligned to the value-creation plan, and increase organizational tempo. Sponsors want clarity, accountability, and measurable progress – not activity without impact.
This discipline extends to talent. Once leaders understand the capabilities required for the plan, they must assess whether the existing team can deliver.
Bain notes that underperformance tolerated early in the hold period is often interpreted as a lack of resolve. The CEOs who thrive make tough calls quickly and build an A-team aligned to the sponsor’s goals.
“What PE really tests is leadership maturity.”
“Execution becomes the differentiator,” said Mr. Cummings. “CEOs who combine operational rigor with the courage to upgrade talent early are the ones who position their companies – and themselves – for success.”
Where Pressure Becomes Opportunity
Private equity is intense, but it can also be transformative. The CEOs who lean in – align early, operate with discipline, communicate openly, and build a high-performing team – often emerge as stronger, more decisive leaders.
“What PE really tests is leadership maturity,” said Mr. Cummings. “The CEOs who thrive are the ones who embrace accountability, operate with urgency, and treat the sponsor as a true partner in value creation.”
For executive search firms, PE operating partners, and talent leaders, Bain’s analysis reinforces a clear truth: value creation in private equity is ultimately a leadership story – and the right leader can change the trajectory of a company’s entire investment cycle.
Article By
Leo Cummings
Leo Cummings is Editor-in-Chief of ExitUp, the investment blog from Hunt Scanlon Ventures designed for professionals across the human capital M&A sector. Leo serves as an Associate for Hunt Scanlon Ventures, providing robust industry research to support the firm’s investment group.
