But with rising interest rates and the rising acquisition prices of companies over the past few years, private equity can no longer make the same profits by simply integrating a few companies. Today, value only comes from true transformation, so PE firms are looking for CIOs who can transform the entire company, not just one division at a time.
“When I hire CIOs for my portfolio companies, I look for people with a technology background but who can think like a business unit leader, which is different from business acumen,” one IT operating partner at a PE firm told me. “Business acumen is understanding the drivers of the business, the performance, and the market. Business unit leadership is the ability to change the business model of a $500 million company. Portfolio company CIOs need to think about running a business, not running a division.”
Being the CIO of a PE-owned company is not for the faint of heart, as the CEO, board, and business partners (and their PE partners) are deeply invested in your work. This situation can bring unique challenges, but it also brings great opportunities. Delivering on your PE value creation plan and enjoying a meaningful exit for everyone, including you, will make you a household name in the PE community, and for many, that's a ticket to an increasingly challenging and lucrative CIO role.
