CEOs of Private Equity–Backed Companies: Leveraging Insights from High-Performing Teams

By: Steven Gilbert and Orla Leonard

Upgrading talent is a necessity identified by most CEOs as growth ramps up. This comes as no surprise. However, what is less evident is how that talent should be organized and deployed against a strategy, starting with the top team. Hiring a stronger supporting cast (e.g., a new CFO or chief product officer) may help, but too many management teams are suboptimized due to factors that extend beyond talent. We see many portfolio company CEOs wrongly assume that filling important talent gaps will automatically result in a performance bump. They jump to action without truly taking the time to organize and focus the top team around the most salient business issues. Having a clear game plan for team development post deal will ensure the business is positioned for acceleration out of the gate versus needing to backtrack and losing valuable time fixing internal issues.

We have identified six differentiating factors of high performance, based on research of 200 senior teams across industry verticals and different-sized organizations. We separated top performers from lower performers (relative to their industry peers) based on profitability, sales and revenue growth, quality of products and services, and employee engagement.

Here are our findings of Aligned Superior Senior Executive Teams (ASSET):

1. Leaders who engage and inspire: An ASSET is significantly more likely to have a leader who excels in a variety of behaviors that strengthen team performance. These leaders excel at holding individuals accountable for shared team goals, specifically around decisions that cut across functional areas of responsibility. They give team members the opportunity to shape direction, they energize team members to achieve goals, and they provide the team with tools to accomplish goals. In addition, they identify and remove barriers to team productivity, recognize and reward strong team and individual behavior, and coach team members to support growth and development.

What can you do?

  • Create a consistent communication schedule with your team that keeps you connected and informed. You can’t make tough and informed decisions by meeting for only 30 minutes once a month.
  • Define decision-making authority to create clarity and empowerment for your team.
  • Don’t simply mandate the team’s purpose—engage the team in defining it.

2. An agile design with the right members in the right roles: The design of the team should be organized around the business strategy and unique operating environment. Once organizational needs are tightly defined, the leader can select the right abilities and mix of talents to execute the plan. Higher-performing teams are nimble and expert in using time-limited ad hoc groups and steering committees to provide information and solve problems below the senior team charter.

What can you do?

  • Move quickly to get the right people in the right roles, and don’t wait until you have a full-team complement before setting tone and direction.
  • Clearly define the team’s tasks (e.g., set strategy, create operational plan) and align meetings around team members. Evaluate how effectively the team delivers and fine-tune their approach.
  • Keep agility front and center, and don’t fall into the trap of running every play through the senior team. Leverage supporting groups to fast-track key initiatives with executive sponsorship.

3. Disciplined focus on the most important enterprise issues: Companies big and small can struggle to identify the most important business factors critical to performance. Decision points can be dizzying for inexperienced CEOs, particularly those dealing with rapid growth and who lack the experience of scaling an organization to the next level. Teams that create focus around the most important priorities vastly outperform those that do not.

What can you do?

  • Ensure the team has enough time to address all aspects of its charter. Flex the agenda to deal with priority issues in enough detail.
  • Create a screen for priority issues, and kick unsuitable agenda items down to ad hoc groups or fact-finding committees.
  • Don’t delegate the agenda—the responsibility for team utilization rests solely with the leader.

4. Efficient decision making that balances speed with quality: High-performing teams are skilled at deciding where time, money, and other resources are best focused. They effectively balance information gathering, deliberation, and execution to address issues facing the business in a timely way. ASSET members are far better at making swift decisions at the right level and getting the right input to make informed decisions.

What can you do?

  • Realize that individuals, not teams, make decisions. Design individual and team interactions based on that knowledge. Be clear about what roles people are playing at any given time
  • Be clear about your personal decision-making process and communicate it to your team—e.g., a preference for thinking out loud versus crystalizing your thoughts alone first. Your approach affects what you need from your team and how it needs to operate.
  • Know that decisions fall into three categories: strategic, operational, and advisory. Be clear with your team members on which role they are playing—and when—and what you need from them.

5. Driving innovation while leveraging core capabilities: Innovation is code for “How will we grow?” ASSET members are clear about their innovation strategy, how they will drive it, and how much growth will be achieved from new products or services. They think ahead, identifying barriers to implementation of projects and ways to mitigate them.

What can you do?

  • Define what innovation means for your company, and keep it as a focal area on the team agenda until it is woven into the fabric of the culture.
  • Encourage team members to stay connected to industry and market trends. Create space in the team agenda to discuss pressing developments.
  • Create regular connection points to levels below the senior team to ensure good ideas are bubbling up and barriers to execution are identified.

6. A positive company culture shaped by team members’ behaviors: Senior teams set the organizational tone. When their level of candor, transparency, and trust is high, levels below are better placed to collaborate without unhealthy politics and bureaucracy that can paralyze execution. High-performing teams own their dynamics, deal with their differences, and put personal issues on the table.

What can you do?

  • Set clear operating norms and personally live by them—if your behavior slips, others will follow.
  • Hold team members accountable to norms. Failure to do so gives license to unhealthy behaviors, particularly associated with conflict resolution.
  • Create mechanisms for upward feedback on senior team members’ behaviors to ensure they align with the norms and culture you want to create.

In summary, building and operating a strong, aligned, and high-performing senior team is not a mystery. It takes a degree of focus, time, and discipline, but it is achievable. Based on our research, it is worthwhile in terms of higher business performance and stronger employee engagement. Clearly, barriers to execution and delivering results can exist at deeper levels in an organization, but the responsibility begins at the top with the leader and senior team. Cracks, gaps, and dysfunction at the top roll downhill, just as positive momentum does. High-performing teams are made and not born; they begin in the mind and behavior of the leader.