The Execution Gap That Derails Value Creation Plans
Private equity investments live or die in the execution phase. The strategy is rarely the problem. According to a study by McKinsey, more than two-thirds of transformation programs in PE-backed companies fall short of their targets. Not because the value creation plan was wrong, but because the organization lacked the capacity to drive it with the required speed and consistency. That gap between strategic ambition and operational reality is where value quietly erodes.
CEOs of portfolio companies face a particular version of this problem. They carry full accountability for results while simultaneously managing upward to investors, lateral across a leadership team that is often newly assembled, and downward into an organization that is in the middle of change. Senior executives in transformation contexts can lose up to 40 percent of their effective working time to coordination, reporting, and internal alignment tasks that do not require their direct involvement. The strategic agenda gets the time that is left over.
In buy-and-build constellations and mid-cap carve-outs, the problem compounds. Integration demands, heterogeneous processes, and multiple workstreams running in parallel create a coordination burden that most management teams are simply not structured to absorb. Critical initiatives stall not because no one cares, but because no one has the mandate, the bandwidth, and the cross-functional access to keep them moving.
This is the context in which the Chief of Staff role has become genuinely strategic in PE portfolio companies. It is not a new concept. The role has existed in government and large corporations for decades. What is new is its application in mid-market portfolio companies, where it is increasingly recognized not as a luxury, but as a structural necessity for reliable execution.
"In the PE environments I have seen, the biggest execution risk is not the quality of the plan. It is the absence of someone who owns the connection between strategy and delivery and who has the credibility, the access, and the drive to hold things together across functions and layers." - Sebastian Leonhard, Managing Partner, 2P Partners
The role is still widely misunderstood. Many boards and CEOs think of a Chief of Staff as a sophisticated assistant or a high-potential rotational candidate. In PE portfolio companies, this framing misses the point entirely. The role functions as a force multiplier for the CEO and as an execution engine for the value creation plan.
What Makes a Chief of Staff Effective in a PE Context
The difference between a Chief of Staff who adds real value and one who becomes a coordination overhead lies almost entirely in the competency profile. Three capabilities define the ones who make a measurable difference.
Strategic clarity under operational pressure - An effective Chief of Staff can absorb ambiguity, identify what matters most, and translate high-level priorities into actionable next steps. This is not about being analytical. It is about making good judgments quickly, in a PE environment where urgency is constant and information is often incomplete.
Cross-functional credibility without formal authority - The Chief of Staff achieves results through influence, not through hierarchy. This requires a combination of interpersonal intelligence, commercial understanding, and the kind of professional credibility that makes functional leads willing to share information and align their teams. Many candidates look good on paper and struggle precisely here.
Execution ownership without micromanagement - There is a specific skill in taking accountability for a result while empowering the people who actually do the work. Chiefs of Staff who drift toward micromanagement create friction and slow things down. Those who hold the outcome loosely enough give space for execution while tight enough to catch drift early.
Beyond these three, a strong Chief of Staff in a PE portfolio company typically demonstrates:
- Investor-readiness: The ability to prepare board materials and investor updates that are accurate, concise, and anticipate the questions a PE sponsor will ask.
- PMO discipline: A natural instinct for structure: milestone tracking, risk flagging, dependency management, and the ability to run a program office without bureaucracy.
- Communication across levels: The capacity to be equally fluent in a C-suite conversation and in a conversation with a plant manager or regional sales director.
- Commercial instinct: An understanding of how the business actually creates value, so that priorities are set in relation to economic impact, not organizational politics.
- Resilience and adaptability: PE timelines are compressed and change is constant. The ability to absorb setbacks, reset quickly, and keep moving is non-negotiable.
It is worth being explicit about what the role is not. A Chief of Staff is not a strategy consultant embedded in the business, even if many come from that background. The deliverable is not a presentation or a recommendation. It is a result. That distinction matters enormously when assessing candidates, and it is one that boards and CEOs frequently underestimate when designing the role.
The organizational implication is also significant. A Chief of Staff only works if the CEO gives the role genuine access, clear scope, and visible support. Without that, even the best candidate becomes a bottleneck rather than an accelerant. The design of the role is as important as the person in it.
How to Get the Role Right: From Design to Hiring to Impact
Start with a clear brief. Before beginning any search, define what the Chief of Staff is actually accountable for. Is the primary need strategic bandwidth for the CEO? End-to-end ownership of specific value creation workstreams? PMO governance across a complex transformation? Or some combination? The answer will shape the required profile significantly. Trying to hire one person to cover all of these simultaneously without prioritization leads to a role that is impossible to fill well.
Assess for execution orientation specifically. Most strong candidates can demonstrate analytical capability and communication skills. Fewer can demonstrate a track record of taking ownership of a result in a complex, politically charged environment and delivering it without formal authority. In interviews and case assessments, push candidates to be specific about the situations in which their personal ownership made the difference. Vague answers here are a signal.
Look carefully at the transition from advisory to operator. Many Chief of Staff candidates come from consulting or investment banking backgrounds. These profiles bring real strengths: structured thinking, investor literacy, and comfort with complexity. The risk is that they default to advisory behaviors when execution is required. Ask directly how they have navigated that transition before, and what they found difficult about it.
Define the mandate in relation to the value creation plan. The most impactful Chiefs of Staff are not generalist support functions. They own specific, high-priority workstreams within the value creation agenda, with measurable KPIs and clear accountability. Connecting the role explicitly to the value creation plan from the start signals its strategic importance and creates the conditions for meaningful contribution from day one.
Measure the role like any other senior position. Chiefs of Staff should have a set of outcomes they are assessed against, not just activities. If the role is designed well and the person is right, the impact is visible: faster decision cycles, higher quality investor reporting, better program adherence, and more management bandwidth available for strategy and people.
"The best Chiefs of Staff I have placed become invisible in the best sense. You do not notice them at the surface, but the whole system runs better. The CEO thinks more clearly, the team moves faster, and the value creation plan actually lands." - Sebastian Leonhard, Managing Partner, 2P Partners
For PE investors and portfolio company CEOs working through transformation, scale-up, or integration challenges, 2P Partners supports the design, sourcing, and assessment of Chief of Staff and senior execution roles. As part of our Executive Search and Leadership Advisory work in the DACH mid-market, we bring a network and a methodology built specifically for the pace and complexity of the PE environment.
SOURCES
McKinsey & Company: The CEO's guide to competing through HR, 2022. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights
Harvard Business Review: The Case for a Chief of Staff, Patrick Doyle, 2020. https://hbr.org/2020/05/the-case-for-a-chief-of-staff
