Private equity sponsors require strong management teams who can create value inside their portfolio investments. Identifying this special grade of executive necessitates a detailed and thorough evaluation process designed to separate the exceptional from the ordinary. In this Q&A, Falcon Partner Lindsay Guzowski details a favored interview question for aspiring PE-backed executives.

Is there a specific interview question you find particularly revealing for aspiring PE-backed executives?

“Tell me about an instance where you noticed something – an opportunity or a problem – nobody else saw. Talk me through what it was, how you found it, and what you did about it.”

I’ve asked hundreds of candidates interviewing for portfolio company C-suite roles that question.

The query probes what we call an executive’s “stretch-drive” performance, which is their ability to truly make a company better. While an executive can improve a business simply by achieving what crosses their desk, portfolio companies require leadership who will identify opportunities and issues that have otherwise been overlooked.

To use a baseball analogy, sponsors cannot afford to trust the fate of their investment to a “replacement level” executive. The aforementioned question helps discern whether a leader has the unique DNA required to propel a leveraged buyout to a rewarding exit.  

What major indicators do you listen for in an answer?

I’m first assessing how “hands-on” they’ve been. If a candidate’s answer is about improving something someone else brought to them or making a...