Against the backdrop of all the changes that are putting permanent pressure on the global economy, two out of three private equity investors are looking for new leaders within the management of their portfolio companies. This is necessary in order to effectively address these changes. Candidates for these leadership positions must demonstrate ‘rebel leadership’ first and foremost, reveals research by recruitment specialist Robert Half at private equity companies in Belgium, France, Germany and the UK.
Today, many C-level managers find themselves in unfamiliar (economic) territory. Over the past four years, the pandemic has redefined the concept of work, disrupting markets and supply chains. ESG, CSR and DEI are high on the policy agenda. Although AI is creating new opportunities, it also involves risks and uncertainties. The war in Ukraine has had a severe impact on energy and food supplies, causing inflation to reach its highest level in 40 years. Consequently, many of these managers lack the experience and agility required to navigate their business through current and future crises.
“For private equity investors, it’s clear: they expect the management to make strategic policy choices that protect investments and allow companies to perform as well as possible”, says Philip Hendrickx, Managing Director of Executive Search at Robert Half Belgium. “As a result, they are questioning the C-level leadership within their companies. Our research shows that two thirds of PE investors have concrete plans to change this leadership in view of the constantly changing context in which our companies have to operate and the qualities required.”
The PE investors are mainly looking for candidates with the knowledge and expertise required to help companies:
tackle supply chain disruption (42%)
safely navigate high inflation (38%)
address regulatory and compliance issues (22%)
deal with permits or licences that are under threat (20%)
handle legal procedures (18%).
Wanted: rebels
So what should these profiles look like in practice? Rebel leaders. After all, a third of private equity investors indicated that they want ‘leaders’ in their portfolio who demonstrate the ability to rebel.
“Take Netflix, for example”, clarifies Philip Hendrickx. “There, the rebellion against the brand's traditional USP has contributed to its strong global growth. This kind of rebel leadership creates disruption for a positive purpose. And this is precisely the skill that private equity investors wish to bring to the management of their portfolio companies.”
The intention is therefore not to create disruption merely for the sake of change, but to implement targeted changes that benefit the company. Given the rapid pace at which the global economy is changing, what makes a company competitive today is different from what will do so in a few years' time. PE investors are therefore looking for leaders who can redefine the standard, simultaneously managing to continue the growth trajectory within this evolving context.
“With the disruption of global markets that we have seen in recent years, private equity investors want bold leaders with rebel qualities. Companies that are finding the right rebels now will thrive best during future disruptions at the micro and macro levels”, concludes Philip Hendrickx.
