Why the right CEO is not always the most impressive candidate on paper

Imagine this.

It’s a scenario based on situations we regularly encounter.

You have just acquired a profitable, founder-led industrial services business.

The investment thesis is clear: expand into new European markets, improve margins, professionalise the organisation, pursue a buy-and-build strategy and prepare the business for exit over the next four to five years.

The market is attractive. The business has strong customer relationships and a defensible position. The plan makes sense.

Now comes one of the most important decisions of the investment:

Who is going to deliver it?

This is where many leadership searches become more complicated than they initially appear.

The obvious candidate

The board defines what looks like a straightforward CEO brief.

They want someone who has:

already been a CEO;
operated in the same sector;
managed a business of similar or greater scale;
worked with private equity;
completed acquisitions;
and successfully delivered an exit.

The search produces several strong candidates. One appears to stand out.

He has run a larger industrial services business, delivered significant growth, completed several acquisitions and worked with two private equity sponsors. His CV gives the board confidence. He knows the sector. He understands investors. He has done it before.

He gets the job. And initially, everything looks right.

Then execution starts to slow

Six months in, the problems are not dramatic. There is no obvious failure. But something is not moving as quickly as it should.

The international expansion programme is delayed while the CEO conducts a detailed review of the existing business.

The pricing initiative is moving slowly because local teams resist greater central control.

The new reporting infrastructure becomes a much bigger project than anticipated.

Two acquisition opportunities are explored but not completed because the CEO is concerned about integration risk.

Every decision is defensible.

But taken together, they create a problem: the value-creation plan is losing momentum.

The board begins to ask a difficult question. Did they hire the wrong CEO?

Not necessarily.

They may have hired the wrong CEO for this particular situation.

The problem wasn’t experience

The CEO was experienced. He was successful. He was credible.

But his previous success had come in a very different environment. He had operated with:

established functional leaders;
mature reporting systems;
substantial corporate resources;
an experienced M&A and integration team;
and a relatively stable operating model.

This portfolio company needed something different. It needed a leader who could build structure while moving quickly — comfortable making decisions without perfect information, able to challenge long-established ways of working, and capable of building a stronger management team while simultaneously delivering growth, margin improvement and acquisitions.

The investment did not need more experience. It needed more relevant experience.

That distinction is easy to miss when a search starts with a conventional CEO specification.

So the brief changed

The question was no longer:

Who has already run a business of this size and done something similar?

It became:

Who has repeatedly built capability, accelerated execution and created structure in a business that was not yet ready for its next stage of growth?

That produced a very different search.

The preferred candidate had never been CEO of a business of comparable size. He had been COO of a rapidly growing industrial platform operating across three countries. During his tenure, he had:

redesigned the operating model;
introduced a new performance management system;
opened two new markets;
integrated three acquisitions;
replaced members of the senior leadership team;
and improved margins during a period of significant operational change.

His title was less impressive.

His evidence was more relevant.

Looking behind the achievements

This is where executive search should go beyond the CV. The candidate was not simply asked what he had achieved.

The search focused on how he had achieved it.

What did the business look like when he joined? What did he change first? Which decisions were his? What resistance did he face? What happened when an acquisition did not go according to plan? How did he decide what needed immediate attention and what could wait? What did he get wrong?

And perhaps most importantly:

Could he explain exactly how his actions had contributed to the results?

The answers revealed something important. He had repeatedly operated in environments where the infrastructure required for the next stage of growth did not yet exist.

He knew how to create structure without creating bureaucracy. He was comfortable making decisions with incomplete information. He had made difficult leadership changes when necessary.

And he understood that operational improvement, international expansion, M&A and organisational development were not separate projects — they were interconnected parts of the same value-creation plan.

That was the leadership challenge the original search had not fully captured.

The first 100 days looked different

Once appointed, the new CEO did not attempt to change everything at once. His first 100 days focused on four things:

Establishing a reliable performance baseline.
Creating clear accountability across the leadership team.
Selecting the first international market for expansion.
Building a practical integration model for future acquisitions.

The objective was not to create activity. It was to create the organisational capability required to execute the investment thesis.

Within the first year, the company had shortened its reporting cycle, implemented the pricing programme, launched its first international market, strengthened the senior leadership team and completed its first acquisition under the new integration model.

The most important change, however, was less visible.

The company was becoming capable of executing without depending on the founder, the sponsor or a handful of individuals.

The lesson for PE

This is not an argument for hiring less experienced CEOs. It is an argument for asking a different question about experience.

A candidate can have an impressive P&L, multiple acquisitions and several successful exits on their CV — and still be a poor match for the next phase of a particular portfolio company.

Equally, a candidate who has never held the top job at the same scale may have precisely the experience needed to deliver the investment thesis.

The difference is context.

Consider the leadership requirement behind different value-creation plans.

A company pursuing aggressive international expansion may need a commercially driven builder. A business undergoing operational restructuring may need a disciplined operator who is comfortable making difficult decisions. A buy-and-build platform may need someone who can integrate acquisitions without killing the entrepreneurial culture that made the business successful. A company approaching exit may need a leader who can institutionalise performance, strengthen the management team and make the business attractive to the next owner.

These are different leadership mandates. They should not all lead to the same generic CEO profile.

What should investors really be assessing?

When evaluating a senior executive, the headline achievement is only the starting point. The more revealing questions are:

What was the situation when they arrived?
What specifically did they change?
How much infrastructure was already in place?
What decisions did they personally make?
What resistance did they encounter?
How did they respond when the plan changed?
Which results can genuinely be attributed to their leadership?
What did they learn from things that did not work?
Have they operated at the pace and level of accountability required in a sponsor-backed environment?

And, most importantly, does their experience match what this business needs to achieve next?

These questions help separate proximity to success from evidence of leadership capability.

Start with the investment thesis — not the job description

This is where experienced executive search can add significantly more value. The search should begin with the investment thesis.

What has the PE firm actually underwritten? What needs to change? What needs to happen in the first 100 days? What must be true in three years for the investment thesis to work?

Only then should the leadership profile be defined. The process becomes:

Investment thesis → value-creation plan → leadership challenge → required capabilities → evidence of those capabilities.

The result is not simply a shortlist of impressive executives. It is a much clearer understanding of why a particular executive is relevant to the investment — and where the risks may be.

The executive is part of the investment thesis

Senior leadership is often discussed as a talent issue. For a PE-backed company, it is much more than that.

The CEO, COO, CFO and other key executives are the people expected to turn the investment thesis into operational reality. That means the leadership assessment should be treated with the same level of rigour as other critical investment decisions.

The most impressive CV is not necessarily the strongest leadership solution. The best candidate may not have the most recognisable name, the largest P&L or the longest list of PE-backed exits.

They may simply have the most relevant evidence.

And that leads to the question we believe should sit at the centre of every senior PE leadership search:

Has this executive solved the specific problem this investment now faces — and can they do it again in this environment?

That is the only question that actually matters.

Want the list of example questions we use to assess CEO, COO and CFO candidates for PE-backed businesses? Message us and we’ll send it over.

If you are assessing a senior leadership appointment for a portfolio company, we would also welcome a conversation about what the business needs to achieve — and the leadership capability required to deliver it.

Clifford Nash | Executive Search for Private Equity & Portfolio Companies