
The McKinsey Podcast Leadership lessons from private equity CEOs
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Mar 19, 2026 Marla Capozzi, a McKinsey partner who studies full-potential diligence and governance. Sacha Ghai, a McKinsey senior partner focused on private-capital leadership and profitability. They discuss how private-equity CEOs transform companies faster. Topics include full-potential diligence, cutting unprofitable revenue, clean-sheeting labor, fit-for-purpose leadership teams, boards as value creators, and treating time as capital.
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PE Firms Win By Fixating On Profitability
- Private equity-backed companies transform faster and outperform peers by focusing on fundamental profitability rather than just top-line growth.
- Marla Capozzi and Sacha Ghai studied ~300 private-capital CEOs and distilled six repeatable practices that drive rapid value creation.
CEO Chose Community Over Quick Labor Cuts
- Many PE CEOs aim to build sustainable companies with community legacy, not just maximize short-term hold-period gains.
- One CEO said he'd exhaust other cost cuts before reducing labor in his local community.
Run Full Potential Diligence Regularly
- Do full potential diligence by taking an investor's outsider view across strategy, operations, CapEx, and governance to identify upside and risks.
- Top PE CEOs run this self-diagnostic regularly and bring findings to the board to shape value-creation plans.
