How to Close the Alignment Gap (and Keep Your Seat) as a PE-Backed CEO
Once your company takes on private equity, “hitting the numbers” isn’t good enough — you have to hit them the right way, with the right narrative, and on the right clock.
And in 2025, that clock is always ticking.
PE firms don’t care that the economy is slowing, that tariffs are unpredictable, that AI is changing how businesses operate every single day. Your investors want results. AlixPartners’ Tenth Annual PE Leadership Survey calls this situation “the pressure cooker from hell.”
Whether your company produces diamonds or crumbles into coal dust depends on how well you can align your priorities as CEO, your company’s best practices, and your PE’s expectations.
This playbook provides actionable strategies to achieve that alignment, secure your position at the top of the company, and keep Making BIG Happen.
1. Lead with the Exit in Mind
Private equity firms filter every judgment and decision through one lens: enterprise value growth that leads toward a sale.
Value creation should also be one of your top objectives as a CEO. A company that’s always ready to be sold is a company that’s always firing on all cylinders. Consistent growth reflects well on you, boosts morale at every level of the company, and instills confidence in your investors.
“You have to remember that the primary metric PE firms get measured on in their business is how well they do at executing the ‘trade’ of buying at X and selling at Y, with the ‘trade’ being the investment in
their portfolio companies,” says Ken Eissing, a Partner and coach at CEO Coaching International. “Many PE firms filter all of their decisions through the lens of how it creates value or benefits the ‘trade’ so to speak. So they need leaders running companies in their portfolio to have that mindset as well.”
Action Steps:
Get Crystal-Clear Alignment on the Exit Goals including timing, target valuation multiples, key milestones, and how PE will (or won’t) support the company along the way.
Reverse-Engineer Quarterly Goals from the Exit Plan: Once you have the What and When, you can work backwards and establish the How, meaning the daily, actionable, measurable steps each employee needs to execute that will achieve daily, weekly, monthly, and quarterly goals. Every best practice, every training session, every one-on-one meeting with subordinates should be focused on accelerating value creation and realizing PE’s investment thesis.
Resist the Temptation to Overpromise: Credibility trumps optimism when you’re aligning with PE. If you don’t overpromise, you’ll increase your likelihood of success. Ramona Cappello, a Partner and coach at CEO Coaching International, advises, “Set expectations. Get alignment on expectations. Deliver those expectations.”
2. Close the Leadership Perception Gap Before It Costs You
According to AlixPartners, while 43% of portco CEOs believe their leadership team provides a competitive advantage, only 10% of PE owners agree. If PE doesn’t believe that the CEO has assembled A-players, or if they don’t think executives and team leaders are productive enough, they’re not going to rearrange chairs in the C-suite. They’re going to replace the CEO.
“Be selfish about the team you have in place,” says Douglas DeBoer, a Partner and coach at CEO Coaching International. “You want to be ultra-focused to ensure the right players are there.”
Action Steps
Conduct Objective Assessments of Your Leadership Team: Don’t wait for PE to question your team’s capabilities. Right now, rate all of your executives and team leaders: A, B, C. Make an action plan to coach up the Bs. And the Cs …
Move Fast on Underperformers: They’re not just dragging down company productivity. They’re reflecting poorly on your judgment and management capabilities. According to McKinsey, companies that reallocate their talent quickly are 2.2X more likely to outperform their peers. Fine tune your hiring process and nail new hires in the first year, and McKinsey estimates a 2.5X ROI.
Showcase Succession Planning and Bench Strength: High-performing CEOs risk seeming inseparable from their companies. That’s great for your job security, but bad for future valuations. And PE firms often don’t prioritize succession planning unless there’s a problem. Just as you reviewed your executives and leaders, have them review all of their direct reports. Put A players on the fast track to future leadership positions, coach up Bs to replenish your As, and move on quickly from Cs.
3. Protect the Downside
According to AlixPartners, nearly half (47%) of portco CEOs anticipate making significant business model changes in the coming year, compared to only 27% of executives in companies without PE funding. Portcos are also 50% more likely to change business models and 2x more likely to divest than non-PE backed firms. That’s a BIG potential for change that CEOs have to manage while also keeping the core business moving towards a two-to-three-year window for growth.
Action Steps
Prioritize 2–3 Quick Wins: Don’t get cute, and don’t get bogged down. Prioritize initiatives that will boost sales, profits, and top-line growth this quarter. “The biggest difference between non-PE companies and PE-backed companies is the clock,” says Douglas DeBoer. “You have to come in there within a quarter and really make an impact, often with limited resources.”
Implement a Cash Bridge Model: Stress test your company’s capital needs under multiple scenarios to analyze and interpret how various internal and external variables might impact your cash flow. This proactive financial modeling allows you to anticipate challenges and prepare contingency plans rather than react to surprises.
Monitor Your Supply Chain, Pricing, and Working Capital: If you’re already struggling with any of these issues, what happens if a recession hits? What happens if tariffs are higher next month? What happens if your lone supplier’s warehouse floods? Scrutinize your current processes to identify potentials for cost reduction and increased operational stability.
4. Communicate Relentlessly
BIG wins and major setbacks have to be communicated with the same clarity and timeliness to maintain alignment and trust with PE.
“Don’t have surprises,” says Ramona Cappello. “Nobody likes to be surprised. If something is happening, make sure you communicate it right away to get them on your side and have them help be part of the solution.”
At the same time, remember that PE firms didn’t invest to run the company — they expect you to do it. Maintain alignment on your What, When, and How or the PE firm might start to think you’re not the right Who for the job.
Action Steps
Set a Regular Cadence: In addition to regularly circulating reports and dashboard updates, schedule time for quarterly deep dives into your overall strategy. Use these meetings to review progress, recalibrate expectations, and proactively resolve any disputes together. The more collaborative your relationship with your PE is, the more successful it will be.
Bring Solutions Alongside Problems: Never deliver bad news without preparing a clear plan to grow through it. Proactively creating risk assessments, mitigation options, contingency plans, and pivot opportunities will remind PE that you know your business better than they do and reassure them that you’re capable of leading through a crisis.
Speak the Same Language: It’s your job to translate all the complex challenges, data, and strategies you’re working on every single day into the one word that all PE investors will understand: “Growth.”
5. Build and Protect Culture
It’s hard to calculate the true value of culture in a spreadsheet. Perhaps that’s why, according to AlixPartners, while 88% of portco executives say their company’s culture is a competitive advantage, fewer than half (48%) say they regularly discuss culture at board meetings. If CEOs aren’t willing to fight for the culture they’ve built, PE might look at talent, facilities, benefits, and hybrid working arrangements for opportunities to cut costs and boost the bottom line.
Action Steps
Measure and Manage Culture: Develop and track KPIs like employee engagement, turnover, and net promoter scores. These numbers will make your culture’s value less nebulous to PE and help you and your team leaders measure the heartbeat of the company.
Help Your Team Adapt Quickly: The world is already moving fast. PE’s accelerated timeline can make it harder for some of your employees to keep pace. Consult with your Chief AI Officer about tech upgrades that can reduce busy work. Offer training and mentorship to hard workers who need a little extra help. Recognize high performers. Celebrate wins and give your people permission to make mistakes, learn, and grow. “The best PE firms and portfolio company executives make sure that the human side of change is at the forefront of their planning,” says Clark Perry of AlixPartners.
Model the Change You Want to See: As your company adapts to PE pressure, all eyes will be on you. Your adaptability and resilience, coupled with a strong, positive vision for the future, will increase buy-in and inspire a can-do culture.
Own the Clock — or the Clock Owns You
“A private equity firm is investing in you just as much as they’re investing in the business,” says Ramona Cappello. “They need to believe that the CEO can get the job done.”
And, as always, the clock is ticking. Portco CEOs can’t afford to wait around for alignment. They need to manufacture it.
So, take back the clock.
Take command of the agenda and relentlessly drive value.
Not because PE says you have to, but because you’re the CEO, and Making BIG Happen is always what’s best for the business you’re leading.
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