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Value creation in professional services – what most PE firms miss
It’s a familiar story in professional services: a private equity firm invests in a promising organization, outlines a bold value creation plan, and then turns to the leadership team to execute.
There’s no problem with the line of thinking; it’s a sound plan.
What we’ve seen, though, is the people who sign off on the growth plan are rarely the people who are expected to personally deliver it.
And that’s the blind spot.
Closing the private equity value creation gap
As Alvarez & Marsal recently noted in their 2025 value creation report, “portfolio companies are struggling to realize the full potential of their value creation plans.” A big reason? The individuals responsible for executing those plans—particularly the line Partners—are often presented with new goals without sufficient clarity, intentionality, or support.
We recently spoke with a private equity backed professional services firm that shared a story that’s consistent with what we’re seeing in the market:
- Aggressive growth mandates lead to hiring additional Partners, supported by a business case that assumes accretive revenue.
- The firm hires a senior leader or Partner based on resume or reputation.
- They assign a bold revenue target based on the business case for hiring the Partner without determining viability.
- The new hire is left to figure out how to succeed, often without clear role expectations or tailored support.
- Six months in, results aren’t meeting expectations—and leadership begins to question the hire.
Of course, every Partner-level hire is thought to be a homerun—otherwise, why make the hire? Yet, we continue to see that Partners fail at rates as high as 30-40%.
And this raises a set of uncomfortable, but essential, questions for firms and their investors:
- Are they clear on what success actually looks like for each role they’re hiring for?
- Are they selecting the right people—not just by visible credentials, but by invisible behavioral and psychometric traits?
- Are they making the right investments to help new leaders gain traction quickly?
In other words, will the firm’s talent strategy support performance at a “private equity pace?”
What we see regularly is PE-backed firms asking Partners to do more, faster… without matching those expectations regarding pace with the investments necessary to support them.
And when those leaders struggle, the reaction is often to pivot. Try someone new. Redefine the role. Hire differently. Fail fast. But at what cost?
In professional services, where the cost of a failed Partner hire can reach into the millions, this is not a sustainable practice. At best, it’s a bad habit. And as Alvarez and Marsal points out, it’s likely a contributor to the reality that many portfolio companies are struggling to realize the full potential of their value creation plans.
A path to accelerating Partner performance
So, what does better look like?
At Kinavic, we believe it starts with three things:
Be Clear on the Job
Don’t assume a title says it all. Define the role in detail: What markets will they need to penetrate? What pace of growth is realistic? What specific outcomes signal success? Without clarity, even the most capable leader is flying blind.
Select for Fit
Visible traits like track record and relationships are only part of the story. Psychometric data can uncover the invisible factors—motivation, strengths, and stress behaviors—that determine whether someone will thrive in the context of a specific role.
Help Them Gain Traction
Traditional onboarding programs and classroom-based learning aren’t enough. Build custom integration and Traction Plans that help individual Partners leverage strengths and address gaps to enable higher performance. Ensure leaders know how to succeed and are equipped to do it—especially in the first 6–12 months when performance pressure is highest.
Some private equity firms conduct leadership due diligence during the deal phase. That’s a good start—but it’s not enough. The real leverage comes post-close, when sponsors and portfolio leadership can work together to assess and activate the line Partners responsible for growth.
Because regardless of the strategy, the capital, or the vision—execution happens (or doesn’t) with the people selling and leading work.
Burning through Partners who struggle to meet the expectations that come along with increased agility and pace isn’t a sustainable—or winning—practice.
Want your Partners to deliver on value creation?
At Kinavic Leadership Acceleration, we help PE-backed firms close this gap. Our proprietary Verity Leadership Assessment℠ and hands-on performance coaching help identify who is most likely to succeed, and how to accelerate their impact.
If your firm is operating at private equity pace, ask yourself: are your Partners equipped to keep up?
If you’re not sure, we should talk.