There are several characteristics that are considered to be beneficial for a CEO to run a private equity-owned company in the lower middle market.

Written by:  The PE Guru – Gerald Moran O’Dwyer, III – Blackmore Partners, Inc. 

Some of the most important include:  

Strong leadership skills: A CEO should have the ability to inspire and lead a team and to effectively communicate the company’s vision and strategy to all stakeholders. 

Operational expertise: A CEO should have a deep understanding of the company’s operations and be able to identify and implement cost savings, revenue enhancements, and other efficiencies to improve the company’s financial performance. 

Strategic thinking: A CEO should be able to think strategically, identify growth opportunities, and make smart, long-term decisions that will benefit the company over time. 

Financial acumen: A CEO should have a strong understanding of financial concepts, including accounting, budgeting, and financial analysis, to be able to effectively manage the company’s finances and make informed decisions. 

 Flexibility and adaptability: A CEO should be able to navigate a rapidly changing business environment and be able to quickly adapt to new challenges and opportunities as they arise. 

Strong negotiation skills: A CEO should have the ability to negotiate effectively with suppliers, customers, and other stakeholders to achieve the best possible outcomes for the company. 

Familiarity with private equity: A CEO should have a good understanding of the private equity model, including the role of the private equity firm, the expectations of the investors, and the process of exiting the investment. 

Strong communicator: A CEO should be able to communicate with various stakeholders, including employees, board members, and investors. This would include both oral and written communication, as well as understanding how to tailor communication to the specific audience. 

Strong Network: A CEO should have a strong network of professionals and industry experts that they can rely on for advice and guidance and to help identify new opportunities for growth. 

Strong ethics: A CEO should be guided by strong ethics and integrity. This is crucial for building trust and credibility with stakeholders and for ensuring that the company is operating in a responsible and sustainable manner. 

Conclusion: 

Having these characteristics will help the CEO effectively lead the company and navigate the unique challenges and opportunities that are present in the lower middle market. Additionally, the CEO should be able to work closely with the private equity firm’s management team to execute the agreed-upon strategy and achieve the desired outcomes.