When a deal team builds a value creation plan, it is also making a bet on people. The model assumes the CEO and the team around them can deliver the growth, the margin work and the integrations, and that the organization underneath can handle the change. Holds are running longer and AI is changing how work gets done inside portfolio companies, so that bet now carries more of the return, and it gets tested sooner.
Human capital operating partners, heads of talent, CHROs and portfolio executives spent a day on that bet in New York recently. The sessions ran under the Chatham House Rule. Frank Scarpelli opened the day with a question deal teams now put to their talent partners more and more often: "Do we have the leaders, the organization and the capabilities to deliver the value we underwrote?"
The Talent Partner Belongs on the Value Creation Team
At a growing number of firms, the talent partner works with the deal team during diligence, helps write the 100-day plan, and stays close to the company through the hold. Much of this work can start before close, and the room traded practical ways to do it. One is to survey employees two or three levels below the CEO about where the company is headed and what they want from a new leader. It shows what a new CEO would inherit and how morale is holding up once people sense a buyer is looking. Another is to watch how a CEO candidate treats people. Do they remember names and bring others into the conversation? When they are in the room, do employees speak up, or look at the table and go quiet?
Formal assessments and thorough reference checks carry real weight, but they don't settle every decision. Most teams have met a candidate who scores well on the profile and still isn't anyone's first choice. The advice in the room was to set a short list of non-negotiables and stay flexible on the rest. Adaptability was the trait people kept coming back to, along with fit, because a strong CEO can still fail at the wrong company. Before starting an outside search, it is also worth asking which roles could be filled by developing people already inside the business.
Alignment is the other issue, and it can break down inside the executive team or inside the sponsor itself. Investors, operating partners and management can all believe in the plan and still pull in different directions. Some friction helps, because it sharpens the plan. It turns destructive when nobody is responsible for the conversation.
In our experience, leadership risk should be handled like commercial or financial risk. Size it in diligence, give it an owner, and check on it regularly. With longer holds, a leadership problem left alone in year one has years to grow before the exit.
Hiring Leaders Who Can Execute on AI
AI readiness is now on many CEO scorecards, and that has made hiring harder. Plenty of candidates talk about AI well. Far fewer have used it to change how a business runs. The talent partner panel spent time on how to tell the two apart, and on when to back a step-up executive who hasn't run a PE-backed company before.
A recent Egon Zehnder report argues that firms hiring for AI are often trying to fill two different jobs with one person: a portfolio-side role judged on operating results and a fund-side role judged on investment decisions. For middle-market firms, it suggests a portfolio company chief AI officer makes sense only when AI is central to the value creation plan. It describes the people who do these jobs well as translators, comfortable with CEOs, deal teams and technologists, and able to connect AI work to returns.
In an interview, ask candidates for specifics. Which workflow did they redesign? Which decision got faster? What number moved, and did it stay there? Someone hired with AI in their title and no clear workflow to own tends to struggle.
The panel also kept returning to the CEO. The CEO is usually the first to see where the business is stuck, or the one who has to admit it. So the sponsor's question becomes: where can we be most helpful in unlocking this leader's potential?
The Clock Has Collapsed
Anish Batlaw, who leads human capital across General Atlantic's portfolio, has written a lot about how AI changes what strong leadership looks like, a theme of the afternoon in New York. His forthcoming book, A-Players, written with Jessica Neal and Ram Charan, argues that leaders used to have years to respond to disruption and may now have months or weeks. The authors name three capabilities that set the best leaders apart: Frame Intelligence, Adaptive Judgment and Learning Velocity. Frame Intelligence is the ability to see a problem differently before anyone else realizes it is a problem.
His earlier research at General Atlantic found that companies consistently outperform when A-players hold more than half of their critical roles.
This is hard for private equity to act on. Deal teams like executives who have done the job before, and a proven résumé is the easiest thing to defend at investment committee. When the playbook keeps changing, though, how a leader thinks and how quickly they learn can count as much as their track record. A talent partner who can assess those qualities properly, and explain the assessment in a way a deal partner trusts, gives the firm a wider pool to choose from.
Ownership Extends Value Creation Beyond the Leadership Team
The last session of the day moved from the top of the company to everyone else, and to broad-based employee ownership as a value creation lever.
Ownership Works, the nonprofit that helps companies and investors give employees a stake, reports that employee-owners at its partner companies had received $2.2 billion in payouts by mid-2026, with another $14.3 billion in awarded equity expected to pay out at future exits. Those figures come from a new Aspen Institute study based on focus groups with 85 workers at 12 employee-owned companies. Workers in the study pointed to better retention, steady process improvement and new ideas coming from the floor. Each of those affects the numbers a buyer reviews at exit.
The study also carries a useful warning for sponsors. Workers said the stake felt like real ownership when it came with regular updates on how the business was doing, training on how the company makes money, a real way to get frontline ideas heard, and a clear link between their daily work and the eventual payout. A grant on its own did much less. That makes employee ownership a culture program as well as a compensation plan, and talent and operating teams need to run it that way.
Where the Conversation Goes Next
Talent partners are being pulled into deals earlier and asked to do more. Alignment came up again and again during the day, from the executive team to the sponsor to the shop floor. Diligence is widening too, beyond the financials to the health of the organization, its morale and how its leaders behave. Firms that give their talent partners the time, access and support to do it well will have a better answer the next time a deal partner asks whether a company has the leaders to deliver the plan.
