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.
