Category: Private Equity
Audience: Portco Leaders, General Fund Managers, CEO Selection Teams, Boards
Overview: CEO selection is about identifying traits that drive success and recognizing risks that lead to failure for the right executive fit.
Read time: 4 minutes
I was interested in a post from Fortune that spoke to what it takes to become a CEO in large organizations. It used Blackstone’s approach as an example and interviewed Blackstone’s Sr. Managing Director and Global Head of Portfolio Talent who shared their vetting process for a new CEO.
The process is extensive, and when I reached the point that it included a three-hour psychometric test, I paused. I once headed a committee that worked with a psychometric firm to develop an assessment for an organization’s certification offering—it was daunting. Then again, I learned a lot.
Success and Failure Modes
Blackstone’s leadership selection architect outlined both success and failure modes.
Success modes for Blackstone included:
Resilience
Confidence
High IQ
Self-awareness
All good traits. The successful leaders I’ve worked with have been in their roles for several years, and their behaviors have led them to excel.
This is reflected in key metrics - high employee retention, effective recruitment, and consistently strong culture scores. Their results are a direct reflection of their leadership approach and consistency.
On the other side, failure modes included:
· Below-average cognitive skills
· Inflexibility
· Insecurity
The failure mode I’ve often observed in struggling organizations relates to inflexibility and insecurity.
For employees moving up within an organization, their skill set has often revolved around understanding and managing operational processes - where rigid structures are necessary to get things done.
Do X to achieve Y. It’s highly transactional.
However, as they advance, the skill sets required evolve. Leadership at higher levels is transformational rather than transactional.
It demands:
More strategic thinking
Greater adaptability in decision-making
A stronger focus on human behavior
This shift can be challenging. The expectation to embrace flexibility while maintaining confidence in decision-making can create a sense of insecurity in leaders who are accustomed to structure and predictability.
The Key Question
“Can this person deliver what the business needs, in the way it needs it, at the time it needs it?” Fortune
For many, this shift is not an easy one. High-potential employees identified for executive roles need more than just past performance - they require mentoring, coaching, and intentional development to transition into C-level positions successfully.
This is true across industries and company sizes - whether it’s Blackstone or a mid-market private equity firm.
Takeaways
Can you identify the success and failure modes within your organization?
Are your leadership development efforts focused on adaptability and strategic vision?
What tools do you use to ensure leaders are prepared for transformation?
Understanding these factors can make all the difference in selecting and developing the right CEO.
Cynthia Kyriazis is the Chief Experience Officer at The Culture Think Tank. Her experience includes executive coaching, consulting, and training. Book a 15-minute chat to discuss your people, performance or profit challenges.