302. What every CEO can learn from private equity

Private equity-backed CEOs face a high-stakes environment where 60% of leaders are replaced within their first two years, shifting the focus from financial engineering to operational value creation. Achieving outperformance requires six core practices: conducting continuous full-potential due diligence, building fit-for-purpose management teams, optimizing labor productivity, eliminating unprofitable revenue, executing relentlessly, and managing time with extreme intentionality. McKinsey partners Sacha Ghai and Marla Capozzi highlight that top-performing CEOs treat labor costs with the same scrutiny as capital expenditures and utilize AI-driven tools to challenge biases and identify inefficiencies. By adopting these rigorous, data-backed disciplines—such as "clean sheeting" calendars to reclaim time—leaders can drive productivity and sustainable growth. These strategies, while essential for private equity, offer a blueprint for broader management teams to improve resilience and deliver superior enterprise value in an increasingly complex global market.