The three traits private equity investors should assess when hiring executives, and why traditional personality profiling can lead to the wrong hiring decisions.

Psychologists have spent decades developing personality assessments designed to help businesses understand how people think, communicate and behave at work. DISC, Myers-Briggs, Hogan, Predictive Index and similar assessments can provide useful information about an individual's personality, communication preferences and likely management style.

The problem begins when businesses use that information to predict something the assessment was never designed to predict: high performance.

Understanding how an executive prefers to communicate is useful. Understanding whether they are likely to perform exceptionally inside a fast-moving private equity backed business is something very different.

When assessing executives, the objective should be to identify characteristics that increase the probability of high performance. No assessment can guarantee that someone will succeed, but a structured process can increase the likelihood of making the right appointment.

There are three characteristics we consistently look for when assessing talent: high conscientiousness, high speed of learning and low neuroticism. Combined with a strong track record and the capabilities required for the specific role, these provide a much stronger foundation for evaluating whether an executive is likely to perform.

Personality Testing Is Useful, but Only If You Use It for the Right Purpose

Traditional personality assessments can provide valuable information after someone joins the business. They can help a CEO understand how an executive prefers to communicate, what motivates them, how they interact with colleagues and how they may respond to different management approaches.

Those insights can make leadership teams more effective.

However, there is an important difference between understanding someone's personality and predicting their performance.

If your organisation has already assessed a significant number of employees and can demonstrate that certain characteristics within your chosen assessment consistently correlate with your highest performers, that information can be extremely valuable. You have effectively created an internal benchmark against which future candidates can be considered.

The challenge comes when organisations adopt an assessment without establishing whether its results have any meaningful relationship with performance inside their business.

A candidate can have a personality profile that appears perfectly suited to the leadership team and still fail to deliver the outcomes required by the value creation plan.

The assessment should therefore support the hiring decision rather than become the hiring decision itself.

Indicator One: High Conscientiousness

The first characteristic we look for is conscientiousness.

Conscientiousness can broadly be considered through two areas: orderliness and industriousness.

Orderliness relates to how organised, structured and systematic someone is in their approach to work. This becomes particularly important at executive level because senior leaders are responsible for managing significant complexity across people, projects and strategic priorities.

Industriousness relates to someone's natural inclination to work hard and consistently apply effort towards achieving an outcome.

The combination matters.

An executive can be highly organised but lack the drive required to execute at pace. Another individual can work exceptionally hard but lack the structure required to direct that effort towards the highest value priorities.

Private equity backed businesses need leaders capable of doing both.

The strongest executives establish systems, create accountability, maintain high standards and consistently follow through on what they say they are going to do. They do not simply create activity. They apply sustained effort in a structured way towards the outcomes that matter most.

Indicator Two: Speed of Learning

No matter how experienced an executive is, they will never have operated inside your exact business before.

Even someone joining directly from your closest competitor will encounter different people, systems, customers, processes, ownership structures and strategic priorities.

This creates a learning requirement.

The question is how quickly they can understand those differences and begin making good decisions.

This is why speed of learning is one of the most important characteristics to assess. Executives operating within private equity rarely have the luxury of spending years becoming comfortable with a new environment. They need to understand complex businesses quickly, identify the important variables and begin contributing to the value creation plan.

Experience can shorten that learning curve, but it cannot remove it.

A candidate who has solved similar problems before may have a significant advantage, but they still need the intellectual capability to recognise where their previous experience applies and where the current situation requires a different approach.

This is particularly important as portfolio companies scale. The challenges facing the business today may be significantly different from those it faces in two years. You therefore need executives capable of continually learning rather than simply repeating what worked previously.

Academic Achievement Can Be a Signal, but It Should Not Become the Decision

One approach some organisations use when considering learning ability is academic achievement. Highly selective universities have already put candidates through demanding selection processes, so a strong academic background can sometimes provide an additional signal of intellectual capability and learning speed.

However, it should remain exactly that: a signal.

It does not guarantee that someone will become an exceptional executive, just as attending a less prestigious institution does not mean someone lacks the ability to perform.

Executive hiring is ultimately about increasing probability rather than finding a single characteristic that guarantees success.

The objective should be to combine multiple pieces of evidence, including track record, structured interviews, references, assessments and demonstrated learning ability, to build the strongest possible picture of the candidate.

Indicator Three: Low Neuroticism

The third characteristic receives considerably less attention in executive hiring, but it becomes particularly important when operating inside a high-pressure environment.

At a simple level, there are two behaviours worth understanding: volatility and withdrawal.

Volatility relates to how someone responds emotionally when circumstances become difficult. Executives regularly face disagreement, missed targets, difficult board conversations and unexpected problems. Leaders who quickly become angry or lose control under pressure can damage trust and reduce the quality of decision making across the leadership team.

Withdrawal presents the opposite problem.

Rather than becoming confrontational when circumstances become difficult, some individuals retreat. They reduce ownership, avoid difficult conversations and move into the background precisely when the organisation needs leadership most.

Neither behaviour is particularly desirable in a senior executive.

Private equity backed businesses need leaders who remain composed when circumstances become difficult. They need executives capable of processing pressure, maintaining perspective and continuing to make rational decisions when the original plan is no longer working.

Why These Traits Matter More in Private Equity

Private equity backed businesses create an environment in which these characteristics are repeatedly tested.

Growth targets are aggressive, investment periods are finite and management teams frequently have to execute several significant initiatives simultaneously. Acquisitions need integrating, systems need improving, leadership teams need developing and EBITDA targets still need delivering while all of this is happening.

An executive who is highly conscientious is more likely to maintain structure and execution through that complexity. Someone with a high speed of learning is more likely to adapt as the requirements of the business change. An executive with low neuroticism is more likely to remain effective when pressure increases.

None of these characteristics guarantees high performance.

Together, however, they can increase confidence that the executive possesses the underlying attributes required to succeed within an environment where change is constant.

Be Careful of the Exception That Makes You Ignore the Process

Every hiring methodology eventually encounters an exception.

You may have an exceptional performer inside your organisation who appears to contradict everything your assessment process suggests. They may be less organised, learn more slowly or respond poorly to pressure, yet continue producing strong results.

These individuals exist.

The mistake is allowing the exception to determine the entire hiring strategy.

Executive hiring should be about increasing the probability of success across multiple appointments rather than proving that every rule applies to every individual. There will always be candidates who succeed despite displaying characteristics that would normally concern you.

The more important question is whether you are prepared to repeatedly bet on finding the exception.

This becomes even more important as businesses scale. An individual who performs successfully in the organisation today may struggle as complexity increases, systems change and the requirements of their position evolve.

Do Not Let an Impressive Candidate Distract You From Your Criteria

One of the hardest moments in a structured hiring process comes when the assessment evidence contradicts your initial impression of a candidate.

Imagine interviewing an executive from your closest competitor. Their industry experience is exceptional, their CV appears perfectly aligned and the interview creates an extremely positive impression. You can already imagine them joining the business.

Then the assessment results identify significant concerns against criteria you previously decided were important.

This is where hiring discipline becomes essential.

It is easy to convince yourself that this candidate is the exception. Their experience feels too relevant to ignore, so the assessment process suddenly becomes less important than it was before you met them.

That defeats the purpose of creating an objective hiring process.

If you establish assessment criteria before interviewing candidates, you need a consistent approach to interpreting that evidence afterwards. Otherwise, the process simply becomes another mechanism that can be ignored whenever a candidate creates a strong enough subjective impression.

Private equity firms take calculated risks throughout the investment lifecycle. Executive hiring should not become unnecessarily risky because an impressive résumé encourages the hiring committee to abandon the process it originally agreed to follow.

Test Your Existing Team Before Applying the Process to Candidates

Before introducing any assessment methodology into an executive hiring process, one of the most useful exercises is to test it against the people already inside your organisation.

Look at your highest performers and understand which characteristics they share. Then examine average and lower performers and determine whether meaningful differences begin to appear.

This creates an internal reference point.

If the characteristics you intend to assess have no relationship with performance inside your organisation, you should question how heavily they should influence future hiring decisions. If strong patterns consistently emerge, you have more evidence to support incorporating those characteristics into the assessment process.

This is particularly useful for rapidly growing businesses because the criteria should not only reflect who performs today. They should also consider who is likely to continue performing as the organisation becomes larger and more complex.

The executive who succeeds in a £30 million portfolio company may require very different capabilities when that same organisation reaches £150 million.

Final Thoughts

Personality assessments can be extremely useful tools, but private equity investors and CEOs need to be clear about what they are trying to measure.

Understanding personality is not the same as predicting performance.

If your objective is to increase the probability of hiring a high performing executive, focus on characteristics that relate directly to how that individual will operate when the environment becomes difficult. Assess whether they are conscientious enough to execute consistently, whether they can learn quickly enough to adapt to a new business and whether they remain composed and engaged when pressure increases.

Then combine that information with the evidence that should sit at the centre of every executive hiring decision: what the candidate has actually achieved, how they achieved it and whether those experiences match the challenges your portfolio company needs them to solve.

No personality assessment can guarantee a successful hire.

The objective is to build a consistent process that gives you better evidence, reduces subjectivity and increases your probability of making the right decision.