5 traits of ‘The Right Mindset’ to succeed in Private Equity in 2023
The success of executive search firms is often accredited to the ratio of successfully completed search assignments, with the measurement of success usually ending at the point of an accepted offer. Is this the ultimate key metric that should be used to evaluate a search partner? We don’t believe that, we believe that it goes one step past that point and is more about what the candidate does post-appointment. The longevity, commitment, value creation, and leadership they provide to the business as it goes through its investment cycle.
Having worked with private equity-backed businesses and their investors since 2008, we have developed a belief that success isn’t as easy to quantify. To succeed in this complex world, with its multiple stakeholders, a particular type of personality is required. A personality that is distinct from the leaders operating the corporate world, but also different to the “start-up mentality”. This is what we call ‘The Right Mindset’, and it is needed for those wishing to succeed in private equity.
Without proof or testing, a belief remains just that, a belief, so we wanted to put our theory to the test. We conducted some robust, academic research with a qualified Occupational Psychologist to confirm our thoughts. We wanted to find out if there is a particular set of attributes that makes a person more suited to, and therefore more likely to succeed in the private equity environment.
The Testing Process
Alongside a behavioural psychologist, we conducted research on two groups of individuals, a Control Group and a Sample Group.
The Control Group consisted of executives and leaders from a wide cross-section of industries – private, corporate, and public sectors. The Sample Group contained CEOs, executives, and other board members of private equity-backed businesses.
A series of psychometric tests were conducted using a well-validated profiling tool, widely regarded as the leading tool of its kind. We supplemented this data by conducting some in-depth, structured interviews with a number of the sample to cross-check the findings.
Preferences across the entire group were measured, and almost across the board, the private equity (sample) group displayed more positive, stronger behavioural preferences than the control group. Below, you’ll find the 5 traits of the Right Mindset needed to succeed in private equity.
- Pursuing Growth
Growth is a goal for every business, not just private equity, yet many lack the desirable characteristics to properly pursue it, unlike other environments, private equity leaders aren’t driven by immediate results or ‘a quick buck’, instead, they are driven by the challenge of growth itself, and are able to effectively communicate with and lead their teams to plan ahead and achieve the end goal for the business.
- Seizing Opportunities
Opportunities are rife in the private equity space, but not everybody is able to effectively identify them and act appropriately in the interest of the business. Successful private equity leaders with the right mindset take the time to make well-informed decisions after developing an understanding of the opportunities available and effectively deliver a solid plan to balance the associated risks with the rewards.
- Embracing Change
Change is often a scary thought for many, why change something that already works? Private equity leaders are unlikely to be satisfied with maintaining performance and are able to embrace the new to keep up with current trends and opportunities, as long as it presents itself as a way to deliver the best results for the business, rather than indulging in personal preferences.
- Directing Others
Successful leaders in the private equity sample have the mentality to pursue the ultimate goal of the company, as well as the ability to effectively direct their teams and align the goal and mission of the company to everyone on their teams. Being able to match your talent to the required needs is a challenge in itself.
- Taking Action
Leaders in our private equity sample were well equipped to take action, being able to identify opportunities, direct your teams and pursue growth are ideal traits, but only those with ‘The Right Mindset’ are able to take swift action on unprecedented changes outside of their control and realign the business on the path to success.
So what does this actually mean to you?
The high-pressure nature of the private equity environment is not for everyone, and we have always believed that it takes a certain ‘type’ of person to navigate its unique challenges to come out on top.
Our research into ‘The Right Mindset’ has validated this opinion, proving that a distinct set of attributes is present in successful management teams and that identifying these attributes in our candidates leads to successful outcomes for our clients. There is a much higher chance of success if they have the right mindset, and this is confirmed through our search processes.
To ensure the necessary levels of due diligence during your Executive hire, consider us as your search partner to secure the future of your business, please get in touch.