The Ideal Leader Profiles for Value Maximisation in High-Growth, PE Businesses
Mapping out the Organisational C-Suite Personas using PACE
By: Leadership Dynamics team
30/08/2023
12 mins
What is PACE?
More extensive and targeted than conventional psychometrics, PACE is the only behavioural assessment tool calibrated using insights and data from thousands of successful private equity exits and engaging directly with successful PE CEOs, CFOs and Chairs, as well as investment directors.
The tool is developed by leading psychologists, is purpose built for the unique leadership demands of venture, private and growth capital backed high-growth businesses, and is the largest study of private equity executives to date.
The acronym ‘PACE’ stands for ‘Pragmatism’, ‘Agility’, ‘Curiosity’ and ‘Execution’, the four overarching behavioural scores tested by PACE – the four key behaviours that differentiate successful teams from their peers in the domain of private equity.
What is the purpose of PACE?
PACE is ultimately designed to assess the behavioural component of a leader’s suitability to a certain role. The focus here is on whether the individual is likely to have a positive impact on an organisation in terms of maximising its value creation according to a certain value creation plan (VCP).
Traditionally, when evaluating someone's potential to be a good leader in a specific role, the emphasis has primarily been on gathering straightforward and provable details about their competencies, skills, and expertise. These are referred to as ‘hard factors':
Market Experience: Market sector area experience – their experience of companies and their market and customer focus.
Situational Experience: experience in how that business has created value whether inorganically, through internationalisation, digital transformation, operational effectiveness etc.
Functional Experience: The individual’s own role in those companies and markets – effectively their work history and their skills or function.
Assessing the behavioural aspect is trickier, and its importance can be understood through this question: Considering a particular VCP and the market conditions, can I expect the person I'm selecting to perform as their past indicates?
People have often turned to psychometric and competencies tests to understand individuals better. However, these tests mostly concentrate on individuals and their role within a team, assessing how personalities come together in a group setting.
They may even drill deeper, as with some psychometrics (Hogan dark side), to see how people may be challenged under pressure. Whilst many of these approaches provide insight into an individual it does not enrich the core “hard data profile” and fails to give insight into how the leader will affect the VCP outcome.
Therefore, the goal of PACE is to function as a tool for evaluating behaviour. Its purpose is to provide insight into how effective an individual could be in a role, considering a particular VCP and the market environment.
Derived from extensive research into successful private equity exits, the four overarching behaviours of PACE are devised to be clearly connected to business performance and are the top-level behaviours, part of a wider set of 30 behaviours and sub-behaviours. The four overarching behaviours are:
‘Pragmatism’: the tendency to want to practically focus on reaching a goal above fully understanding a situation. The essence of this can be captured as a strong belief in the power and effectiveness of one’s own agency. Highly pragmatic individuals believe in the power of their own will to achieve their goals, and that with a good plan they can perform effectively no matter the circumstances to succeed.
‘Agility’. For instance, agile leaders are seen as always staying sharp, thanks to their initial emphasis on constant growth. The Agile approach involves regularly reassessing the market and swiftly adjusting the business to benefit from present and upcoming changes. Highly agile individuals are likely to be curious and flexible.
‘Curiosity’: beneficial for making decisions, communicating effectively, and quickly grasping the dynamics of a new company. Highly curious individuals prefer to approach problems by thinking about them conceptually, looking at them from a perspective of endless possibilities.
‘Execution’: represents the valuable ability of a leader to put their ideas into action and actually get the job done. Leaders who excel at execution are likely to be individuals who prefer to take on tasks themselves. They are driven to work hard, reach ambitious goals, and take personal responsibility for their plans' outcomes.
It is important to note here that although the PACE profiling can provide valuable insights into candidates behavioural strengths and areas for growth in hiring, PACE should be considered from a complementary perspective too. Just because a potential CFO does not match the archetypal profile of a CFO in a high growth business, it does not mean that they could not be an excellent fit within an existing team. Using Leadership Dynamics and PACE together allows you to test complementarity between existing C-Suite members and potential candidates so you can make smarter hiring and succession planning decisions.
Situational, Market and Functional Experience - Introducing the sub-factors
Situational and Market experience is an individual’s level of experience in different company contexts (markets, company structures, successful value creation plan execution etc.). This relates to an individual’s readiness to take on a particular functional role given its wider relation and responsibilities to the company’s growth plan.
The situational factor is an amalgamation of the following sub-factors:
An individual’s level of experience realising an investment.
An individual’s level of experience realising an investment across different markets.
An individual’s level of experience making acquisitions within a market.
An individual’s level of experience making acquisitions across different markets.
Market experience is an amalgamation of the following sub-factors:
An individual’s level of experience within a company within a market.
An individual’s level of experience within a market across multiple companies.
An individual’s level of experience within a specific company ownership type.
An individual’s level of experience within companies of a similar size to the current company.
Functional Experience is experience which contributes to the individual’s readiness to take on a certain functional role in the business given their level of experience in this role as well as less senior roles within the same function.
The functional factor is an amalgamation of the following sub-factors:
An individual’s level of experience in the role.
An individual’s level of experience in the role across multiple companies.
An individual’s level of experience at the level of seniority, but irrespective of function.
An individual’s level of experience in any role in the function (regardless of seniority).
Introducing the Archetype Structure
We can understand the different aspects of successful roles like CEO, CFO, CMO, etc., by using the Archetype Structure below:
All of the below C-Suite roles and mapped responsibilities, behaviours and experiences are built using this Archetype Structure.
Based on our research from the previous 10 years, and data from tens of thousands of successful private equity exits - the structure allows us to profile the archetypically successful leaders in each specific role within a high growth company.
Chief Executive Officer - CEO
The CEO is the highest-ranking executive in a company, responsible for directing the course of the business and its operations.
Functional Responsibilities
The functional responsibilities of the CEO are:
Serving as the anchor of the team, with a complementary team balancing priorities and focuses.
Engaging across all areas of the team, supporting and driving as required.
Competencies
In order to fulfil the functional responsibilities, the CEO has to be able to achieve the following top 5 things, ranked from 1-5 in importance, and as an illustrative example of a total of 10 main competencies.
Essential Situational, Market and Functional Experiences for the CEO
To help the CEO succeed in their role and fulfil their responsibilities, they should have a diverse range of situational, market and functional experiences. Examples of key experiences that are important for successful CEOs include:
Functional Experience: The CEO has strong experience in any role in the management function (regardless of seniority)
Proposed Behavioural Archetype
The following behaviours are commonly found in the most successful CEOs of private equity backed businesses. Remember that these behaviours represent a small subset of a much wider and deeper behavioural set:
Mid Pragmatism, on the Pragmatism side - more analytical than average
High Agility - higher than average in team
High Curiosity - highest in team
Mid-High Execution - average in team
If you are interested in understanding more about the core and secondary competencies, explore PACE yourself or get in touch with the team at Leadership Dynamics.
Below you can see the behavioural archetype mapped according to the PACE framework:
Chief Financial Officer - CFO
The CFO is the leader responsible for directing the financial management of the business.
Functional Responsibilities
The functional responsibilities for the CFO are:
Balancing a strategic focus on value creation and a responsibility for value measurement and crystallisation.
Ensuring that the rest of the leadership team are delivering against the priorities of the business.
Competencies
In order to fulfil its functional responsibilities, the CFO has to primarily be able to achieve the following top 5 things, ranked from 1-5 in importance, and as an illustrative example of a total of 10 main competencies.
Essential Situational, Market and Functional Experiences for the CFO
To help the CFO succeed in their role and fulfil their responsibilities, they should have a diverse range of situational, market and functional experiences. Some key experiences that are important for successful CFOs include:
Market Experience: Strong experience within a specific company ownership type in the other narratives is not important for the CFO’s function specific responsibilities.
Functional Experience: The CFO has very strong experience in the CFO role, and this experience is also of the highest importance for the CFO specifically, compared to the rest of the functions.
Proposed Behavioural Archetype
The following behaviours are commonly found in the most successful CFOs of private equity backed businesses. Remember that these behaviours represent a small subset of a much wider and deeper behavioural set:
Very high Pragmatism - highest in team
Mid Agility - below average in team
Mid Curiosity - lowest Curiosity in team/most Functionalist
High Execution - above average in team
If you are interested in understanding more about the core and secondary competencies, explore PACE yourself or get in touch with the team at Leadership Dynamics.
Below you can see the behavioural archetype mapped according to the PACE framework:
Chief Human Resources Officer - CHRO
The CHRO is the leader responsible for overseeing human capital management, including hiring
and processing conflict and grievances.
Functional Responsibilities
The functional responsibilities of the CHRO are:
Taking responsibility for enabling the business to deliver value through human capital, while focusing on value measuring and delivering
Balancing tactical considerations of delivery and resource management alongside strategic considerations of value delivery for the VCP
Competencies
In order to fulfil its functional responsibilities, the CHRO has to be able to primarily achieve the following top 5 things, ranked from 1-5 in importance, and as an illustrative example of a total of 10 main competencies.
Essential Situational, Market and Functional Experiences for the CHRO
To help the CHRO succeed in their role and fulfil their responsibilities, they should have a diverse range of situational, market and functional experiences. Some key experiences that are important for successful CHROs include:
Functional Experience: The CHRO has strong experience at the level of seniority of the CHRO (irrespective of function), and this experience is of significantly high importance for the CHRO specifically, compared to most of the other functions.
Functional Experience: The CHRO has very strong experience in any role in the HR function (regardless of seniority), and this experience is of significantly high importance for the CHRO specifically, compared to most of the other functions.
Proposed Behavioural Archetype
The following behaviours are commonly found in the most successful CHROs of private equity backed businesses. Remember that these behaviours represent a small subset of a much wider and deeper behavioural set:
Mid Pragmatism, on the Analytical side - most analytical in team
Mid Agility, on the Agility side - average in team
Mid Curiosity, on the Curiosity side - slightly above team average
Mid Execution, on the Execution side - below team average
If you are interested in understanding more about the core and secondary competencies, explore PACE yourself or get in touch with the team at Leadership Dynamics.
Below you can see the behavioural archetype mapped according to the PACE framework:
Chief Operating Officer - COO
The COO is the leader responsible for overseeing and directing the day-to-day operations of the
business, and integrating processes and systems to facilitate workflow.
Functional Responsibilities
The functional responsibilities for the COO are:
Providing a tactical focus on the delivery of value within the business.
Driving effectiveness and efficiency within the organisation and maximising the ability of the business to deliver value.
Competencies
In order to fulfil its functional responsibilities, the COO has to be able to primarily achieve the following top 5 things, ranked from 1-5 in importance, and as an illustrative example of a total of 10 main competencies.
Essential Situational, Market and Functional Experiences for the COO
To help the COO succeed in their role and fulfil their responsibilities, they should have a diverse range of situational, market and functional experiences. Some key experiences that are important for successful COOs include:
Functional Experience: The COO has strong experience in the COO role, and the COO lies at the top of the middle of the functions as to how important this kind of experience is for it specifically.
Functional Experience: The COO has strong experience at the level of seniority of the COO (irrespective of function), and this experience is of significantly high importance for the COO specifically, compared to the other functions.
Proposed Behavioural Archetype
The following behaviours are commonly found in the most successful COOs of private equity backed businesses. Remember that these behaviours represent a small subset of a much wider and deeper behavioural set:
High Mid Pragmatism
Mid Agility, Agility side
Mid Curiosity - below average in team
High Execution - second highest in team
If you are interested in understanding more about the core and secondary competencies, explore PACE yourself or get in touch with the team at Leadership Dynamics.
Below you can see the behavioural archetype mapped according to the PACE framework:
Chief Marketing Officer - CMO
The CMO is the leader responsible for directing and overseeing the Marketing function of a
business.
Functional Responsibilities
The functional responsibilities for the CMO are:
Value capturing and value creation, while balancing tactical and strategic concerns.
Bringing value into the business, while leveraging technologies and ensuring long term sustainability in their methods.
Competencies
In order to fulfil its functional responsibilities, the CMO has to be able to primarily achieve the following top 5 things, ranked from 1-5 in importance, and as an illustrative example of a total of 10 main competencies.
Essential Situational, Market and Functional Experiences for the CMO
To help the CMO succeed in their role and fulfil their responsibilities, they should have a diverse range of situational, market and functional experiences. Some key experiences that are important for successful CMOs include:
Functional Experience: The CMO has reasonable experience in the CMO role, however this experience is less important for the CMO specifically, compared to many of the other functions.
Functional Experience: The CMO has reasonable experience in the CMO role across multiple companies, and this experience is significantly important for the CMO specifically, compared to many of the other functions.
Functional Experience: The CMO has reasonable experience at the level of seniority of the CMO (irrespective of function), and the CMO lies at the top end of the middle of the team as to how important this kind of experience is for it specifically, compared to the other functions.
Proposed Behavioural Archetype
The following behaviours are commonly found in the most successful CMOs of private equity backed businesses. Remember that these behaviours represent a small subset of a much wider and deeper behavioural set:
Mid Pragmatism, on Pragmatism side
Mid Agility, on Agility side
Mid Curiosity, on Curiosity Side
Mid Execution, on Execution Side
If you are interested in understanding more about the core and secondary competencies, explore PACE yourself or get in touch with the team at Leadership Dynamics.
Below you can see the behavioural archetype mapped according to the PACE framework:
Chief Technology Officer - CTO
The CTO is the leader responsible for overseeing the technological needs of the business and
applying technology to the business to improve its processes and products for better business
outcomes.
Functional Responsibilities
The functional responsibilities for the CTO are:
Balancing strategic focus and value creation - driving long term value creation within the business.
Leveraging technology in order to maximise and sustain the value of the business moving forward.
Competencies
In order to fulfil its functional responsibilities, the CTO has to be able to primarily achieve the following top 5 things, ranked from 1-5 in importance, and as an illustrative example of a total of 10 main competencies.
Essential Situational, Market and Functional Experiences for the CTO
To help the CTO succeed in their role and fulfil their responsibilities, they should have a diverse range of situational, market and functional experiences. Some key experiences that are important for successful CTOs include:
Functional Experience: The CTO has very strong experience in any role in the technical function (regardless of seniority), and this is accordingly most important for the CTO specifically, compared to the rest of the functions.
Proposed Behavioural Archetype
The following behaviours are commonly found in the most successful CTOs of private equity backed businesses. Remember that these behaviours represent a small subset of a much wider and deeper behavioural set:
High Mid Pragmatism, close to boundary
Mid Agility, close to centre
High Curiosity
Mid Execution, on Execution side
If you are interested in understanding more about the core and secondary competencies, explore PACE yourself or get in touch with the team at Leadership Dynamics.
Below you can see the behavioural archetype mapped according to the PACE framework:
Chief Commercial Officer - CCO
The CCO is the leader responsible for directing and overseeing the sales operations of the
business, making sure that the sales team are meeting company revenue targets.
Functional Responsibilities
The functional responsibilities for the CCO are:
Tactical value creation and value capturing.
Securing and bringing revenue and value into the business, and ensuring that the revenue is additive to the businesses value creation plans.
Competencies
In order to fulfil its functional responsibilities, the CCO has to be able to primarily achieve the following top 5 things, ranked from 1-5 in importance, and as an illustrative example of a total of 10 main competencies.
Essential Situational, Market and Functional Experiences for the CCO
To help the CCO succeed in their role and fulfil their responsibilities, they should have a diverse range of situational, market and functional experiences. Some key experiences that are important for successful CCOs include:
Functional Experience: The CCO has very strong experience in the CCO role, and this is significantly important for the CCO specifically compared to most of the other functions.
Proposed Behavioural Archetype
The following behaviours are commonly found in the most successful CCOs of private equity backed businesses. Remember that these behaviours represent a small subset of a much wider and deeper behavioural set:
Mid Pragmatism
High Agility
Mid Curiosity, on Curiosity side
Mid Execution, on Execution side
If you are interested in understanding more about the core and secondary competencies, explore PACE yourself or get in touch with the team at Leadership Dynamics.
Below you can see the behavioural archetype mapped according to the PACE framework:
Managing Director - MD
The MD is the leader responsible for managing the day-to-day business of the company,
identifying opportunities as they arise and pursuing them.
Functional Responsibilities
Functional Responsibilities
The functional responsibilities for the MD are:
Balancing value capturing and value delivery priorities.
Understanding growth and margin of a business unit, ensuring that the revenue generation and operational delivery elements of the business are effectively maximising their competitive market position, products, and customers.
Competencies
In order to fulfil its functional responsibilities, the MD has to be able to primarily achieve the following top 5 things, ranked from 1-5 in importance, and as an illustrative example of a total of 10 main competencies.
Essential Situational, Market and Functional Experiences for the MD
To help the MD succeed in their role and fulfil their responsibilities, they should have a diverse range of situational, market and functional experiences. Some key experiences that are important for successful MDs include:
Functional Experience: The MD has very strong experience in the MD role, and this is also a significantly important kind of experience for the MD specifically, compared to the other functions.
Functional Experience: The MD has strong experience in any role in the management function (regardless of seniority), and this experience is of significantly high importance for the MD specifically, compared to many of the other functions.
Proposed Behavioural Archetype
The following behaviours are commonly found in the most successful MDs of private equity backed businesses. Remember that these behaviours represent a small subset of a much wider and deeper behavioural set:
High Mid Pragmatism/High Pragmatism
Mid Agility, on Mastery side - significantly below team average
Mid Curiosity, on Curiosity side - slightly above team average
Mid Execution, on Execution side - on team average
If you are interested in understanding more about the core and secondary competencies, explore PACE yourself or get in touch with the team at Leadership Dynamics.
Below you can see the behavioural archetype mapped according to the PACE framework:
Chair
The Chair is the leader responsible for advising the board throughout the value creation plan and
holding individuals to account.
Functional Responsibilities
The functional responsibilities for the Chair are:
Providing strategic oversight and insights within the team.
Ensuring strategic priorities are developed and implemented by the team.
Balancing value creation and value measuring, such that they tie together the entire VCP.
Competencies
In order to fulfil its functional responsibilities, the Chair has to be able to primarily achieve the following top 5 things, ranked from 1-5 in importance, and as an illustrative example of a total of 10 main competencies.
Essential Situational, Market and Functional Experiences for the Chair
To help the Chair succeed in their role and fulfil their responsibilities, they should have a diverse range of situational, market and functional experiences. Some key experiences that are important for successful Chairs include:
Market Experience: The Chair is aided by strong experience within a specific company ownership type, and this kind of experience is most important for the Chair specifically, compared to the rest of the functions.
Functional Experience: The Chair has strong experience at the level of seniority of the Chair (irrespective of function), and this kind of experience is most important for the Chair specifically, compared to the rest of the functions.
Proposed Behavioural Archetype
The following behaviours are commonly found in the most successful Chairs of private equity backed businesses. Remember that these behaviours represent a small subset of a much wider and deeper behavioural set:
High Pragmatism
High Agility
Mid Curiosity, on Curiosity side
Mid Execution, on Advisory Side
If you are interested in understanding more about the core and secondary competencies, explore PACE yourself or get in touch with the team at Leadership Dynamics.
Below you can see the behavioural archetype mapped according to the PACE framework:
