Why an exceptional track record does not necessarily mean you have found the right COO for your portfolio company.

A Chief Operating Officer can have an exceptional track record, successfully scale multiple businesses and still be completely wrong for your portfolio company.

This is one of the biggest challenges when assessing senior operating executives. A candidate can look outstanding on paper, interview well and appear to have every credential required for the position. Six months after joining, however, the CEO and private equity investor can find themselves questioning why the appointment has not worked.

The problem is often that the business hired a great COO, but not the right COO for the specific environment they were entering.

Finding the right Chief Operating Officer requires looking beyond the strength of the résumé. You need to understand the complexity of the business you are building, the value creation plan that needs to be executed and the capabilities required to take the company to its next stage of growth.

The assessment should therefore start with the portfolio company, not the candidate.

Hire the COO for the Business You Are Building

We recently worked on a Chief Operating Officer search for a private equity backed manufacturing business generating approximately $200 million in revenue. The investment plan was to grow the company towards $400 million through a combination of organic growth and acquisitions.

The business did not simply need an experienced COO. It needed an executive who understood what operating a $400 million organisation would require.

That distinction fundamentally changed the search.

Rather than finding someone perfectly equipped to operate the business as it existed today, we focused on identifying executives who had already experienced the level of scale, complexity and operational challenge the company was expected to encounter in the future.

This is an important consideration for any private equity investor or CEO hiring into a portfolio company. If your investment thesis requires doubling revenue, completing multiple acquisitions or significantly transforming operations, hiring an executive who has only operated at your current level may create another leadership requirement as soon as the business successfully grows.

Your hiring criteria should therefore reflect where the business is going, not simply where it is today.

Start With the Traits That Predict High Performance

Experience is important, but experience alone does not determine whether an executive will perform.

There are several underlying traits we consistently assess when evaluating Chief Operating Officers. One of the most important is intelligence, particularly when defined as speed of learning. Private equity backed businesses change quickly, and the strongest COOs can enter complex environments, understand how the organisation operates and begin making good decisions without requiring an extended learning period.

Emotional stability is equally important. A COO will regularly encounter missed targets, integration problems, difficult personnel decisions and unexpected operational challenges. The executive needs to remain calm and calculated when circumstances become difficult rather than allowing pressure to negatively influence their decision making.

Conscientiousness provides another important indicator. Exceptional operators follow through on commitments, maintain high standards and take responsibility for ensuring things actually get done. Combined with strong emotional intelligence, this allows them to manage relationships effectively across the CEO, board, private equity sponsor and wider management team.

Above all, we look for extreme ownership. Great COOs do not immediately blame the market, their predecessor, the investment team or another department when something goes wrong. They take responsibility for outcomes, identify what needs to change and act accordingly.

Look Beyond the Track Record and Understand How the Results Happened

Track record remains one of the most important areas of COO assessment, but simply identifying impressive numbers is not enough.

If a candidate tells you that revenue doubled during their tenure, you need to understand exactly how it happened. How much growth was organic? How much came through acquisitions? What happened to EBITDA during the same period? Which value creation initiatives produced those results, and what was the candidate personally responsible for?

The same level of scrutiny should be applied to acquisitions. If the executive has operated within an acquisitive business, understand how involved they were in integration, what problems emerged and how effectively they brought the acquired companies into the wider platform.

Private equity experience also needs to be explored in detail. Having worked for a private equity backed company is useful, but the real question is whether the executive understands the pace, accountability and expectations associated with executing a value creation plan within a defined investment period.

Liquidity events should be assessed in the same way. Participating in a successful exit and leading the operational improvements that helped create that exit are two very different experiences.

The objective is to understand what the COO personally changed and how those changes affected revenue, EBITDA and ultimately enterprise value.

Determine Whether They Were the Instigator or the Passenger

One of the most important distinctions to make during a COO interview is whether the candidate drove the results they describe or simply happened to be present when those results occurred.

Businesses can grow for many reasons. Markets expand, pricing environments improve, acquisitions increase revenue and exceptional CEOs can create strategies that the wider executive team subsequently executes.

None of those things automatically make the COO a poor executive. However, they do make it important to understand exactly where their contribution began and ended.

When a candidate discusses a successful value creation initiative, keep asking where the idea originated. Who identified the problem? Who developed the solution? Who presented the recommendation? Who secured support from the board? Who led implementation? What did the COO personally do when execution became difficult?

The strongest operators can answer these questions in considerable detail because they were directly involved in creating the result.

Private equity firms should be looking for COOs who identify problems, develop ideas and use information from the CFO and wider leadership team to determine where operational improvements will generate the greatest return. They should not simply execute someone else's value creation plan. They should contribute meaningfully to creating it.

Great COOs Are Servant Leaders

A high performing COO should make the CEO and the wider organisation better.

This requires a very different leadership style from an executive focused on building their own internal empire. The COO should understand that their role is to strengthen the entire organisation, develop the leadership team and create an operating environment in which other executives can perform more effectively.

Talent development therefore becomes a significant part of the assessment.

The strongest COOs build high performing teams, develop promising leaders and establish clear accountability throughout the organisation. At the same time, they are prepared to upgrade the team when individuals are no longer capable of performing at the level the business requires.

This becomes particularly important during rapid growth. The management team capable of running a $50 million business may not necessarily be capable of running the same organisation at $150 million. An exceptional COO recognises when the capabilities of the leadership team need to evolve alongside the business.

The Best COOs Are Obsessed With Constraints

One of the most valuable characteristics of a private equity COO is the ability to identify the constraint currently preventing the business from creating more value.

There will always be more potential initiatives than the management team has time or resources to execute. The challenge is determining which problem deserves attention first.

A constraint focused COO continually asks which issue, if solved, will generate the greatest return on investment for the business. Once that constraint has been addressed, they identify the next one and repeat the process.

This prevents management teams from becoming distracted by initiatives that create activity without creating meaningful enterprise value.

The COO's responsibility is not simply to improve operations. It is to determine which operational improvements matter most and then ensure the organisation executes them successfully.

Commercial Acumen Matters as Much as Operational Excellence

A COO who understands operations but does not understand how the company makes money will struggle to become a genuine value creation partner.

The strongest operating executives understand the relationship between sales, customers, pricing, service delivery, productivity and profitability. They recognise that operational excellence only creates meaningful value when it contributes to stronger commercial outcomes.

They are also highly data driven. Rather than relying solely on experience or instinct, they use information to understand performance, identify constraints and measure whether operational initiatives are producing the intended results.

Experience within a world class or blue chip organisation can also be a valuable signal. Executives who have spent part of their careers inside highly developed operating environments have often seen first hand what exceptional processes, systems and management standards look like. The important question is whether they can adapt those lessons to the very different realities of a private equity backed portfolio company.

Ultimately, a strong COO needs to be a change and transformation leader. They should be capable of improving processes, increasing operational discipline and leading multiple functions through periods of significant change.

The Red Flags That Should Make You Look Deeper

An impressive career history should never prevent you from investigating potential warning signs.

Job movement is one example. A single short tenure may have a perfectly reasonable explanation, but a repeated pattern of short roles deserves significantly more scrutiny. You need to understand why the executive continually moved and whether the same circumstances are likely to repeat inside your portfolio company.

A lack of clarity around results is another concern. Senior operating executives should understand the financial performance of the businesses they helped lead. If a COO cannot explain what happened to revenue and EBITDA during their tenure, it becomes difficult to establish the commercial impact they actually created.

The same applies to private equity exits. If someone has worked across several private equity backed businesses without experiencing a successful liquidity event, that does not automatically make them a poor candidate. It does, however, create an obvious area that needs to be understood during the assessment process.

Reasons for leaving should also be consistent and credible. Contradictory explanations or vague answers can indicate that there is more to the story than the candidate is initially willing to explain.

Great COOs Can Tell You About Their Mistakes

One of the biggest red flags is an executive who cannot identify meaningful mistakes from their career.

Experienced operators have made mistakes. They have hired the wrong people, prioritised the wrong initiatives, underestimated integration challenges, pushed transformation programmes too quickly or failed to recognise problems early enough.

Private equity firms should not necessarily view those experiences negatively.

In many cases, they are exactly why previous private equity experience is valuable. You want executives who have already encountered difficult situations, made mistakes and developed better judgement because of them.

What matters is whether they can explain what happened, accept responsibility for their contribution and articulate what they subsequently changed.

If every failure was caused by the market, the private equity sponsor, the CEO, a predecessor or another member of the leadership team, you should question whether the executive possesses the level of ownership required for the COO position.

Great operators understand that leadership means taking responsibility for outcomes, including the ones that did not go according to plan.

Final Thoughts

Hiring an exceptional COO is not about finding the executive with the longest résumé, the biggest previous company or the most impressive collection of job titles.

It is about identifying the person capable of successfully operating the business you are trying to build.

That means assessing whether they can learn quickly, operate calmly under pressure, take ownership and develop high performing teams. It means understanding whether they personally drove the revenue and EBITDA improvements on their résumé, whether they can identify the constraints preventing growth and whether they possess the commercial awareness required to translate operational improvements into enterprise value.

Most importantly, it means hiring against the future requirements of the portfolio company rather than its current circumstances.

If you are building a $400 million business, do not simply hire the best COO for the $200 million business you have today.

Hire the COO capable of helping you build the $400 million business you want tomorrow.