As the private equity model continues to build momentum, more executives from public companies are being approached to join PE-backed companies. At Lead5, CFOs are increasingly telling us that they are considering making the jump into the PE-backed world, and they want to understand if they are a good fit before making the move. In this blog, I’m going to share with you the 5 skills that PE-backed CFOs must master to be successful in this challenging and lucrative operating environment. These insights are from my recent conversation with Dave Justus, a veteran PE-backed CFO, and also a Lead5 advisory board member.
1. Focus on building value in addition to the traditional blocking and tackling roles. Examples are experience in building teams, systems, and processes that allow businesses to effectively scale. For PE-Backed CFOs, strong financial chops are table stakes. The real key is possessing solid leadership that allows you to build value in a time and resource-constrained operating environment.
2. Bring a strategic mindset, especially to resource allocation discussions. In the PE-backed model, you will be the driving force in delivering the ROI that your investors seek. Finance executives are uniquely positioned to have the best data and insights about resource allocation decisions and recommendations.
3. Have an ownership mindset. Founders have a unique perspective and passion that can be embraced. It’s your job to tap into that passion and inspire your teams to ‘play up’ to that level. Owners are entrepreneurial by nature, and you should be, as well. This means rolling up your sleeves and getting important work done that may fall outside your functional area.
4. Be the type of team player that makes the rest of the team better. Identify weaknesses and problem areas and focus your efforts on strengthening those spots. Outline a clear vision to your team and a path on how to get there. Know when your team needs a healthy push vs. when it’s time to take your foot off the gas. Eliminate roadblocks and foster healthy, pro-active communication.
5. Work hard and have fun with a purpose. Being a PE-backed CFO will challenge you in ways that traditional CFOs roles won’t. It’s important to clarify your motivation before you even begin on this path. Once you’ve clarified your personal focus, you’ll need to demonstrate through your work ethic that you are committed to success. This will trickle down to everyone in your organization. While the financial exits of these deals are lucrative to the point of being legendary, you are going to burn out if you don’t have a sincere higher purpose in mind. There are going to be periods of high stress. It’s during these times that you have to embrace the challenge and learn how to have fun! The teams you lead will feed off your positive attitude, and together, you’ll be on solid footing on a path towards success.
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