Leading tech in a PE portfolio company: 5 things you need to know

But over the last few years, with interest rates high and the purchase price for companies going up, private equity can’t get the same returns by just putting a few companies together. Today, value comes only from true transformation, so PE firms are looking for CIOs who can transform an entire company, not department by department.

“When I recruit CIOs to our portfolio companies, I look for people who have a technology background, but think like a business unit leader, which is different from business acumen,” as one IT operating partner for a PE firm told me. “Business acumen is understanding business drivers, performance, and markets. Business unit leadership is the ability to change the business model of a $500 million company. CIOs of portfolio companies need to think about running a business, not running a department.”

Being a CIO of a PE-owned business isn’t for the faint of heart with the CEO, board, and your business partners (with their PE partners) deeply invested in your work. This situation can provide a unique set of challenges, but also tremendous opportunity. Once you’ve delivered on a PE value creation plan, so everyone, including you, enjoys a meaningful exit, you’ll be a known entity in the PE community, which, for many, is a ticket to increasingly challenging and lucrative CIO roles.