The 14 Most Important Leadership Qualities in Portfolio Companies

No one leader can possess all the leadership qualities required for high performance, but a team can. So what are they and how do they impact the dynamic?

By: Leadership Dynamics team


6 min

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The 14 Most Important Leadership Qualities in a Senior Team

Most articles on leadership qualities will offer guidance on what individuals need to develop to become a leader. In this one we intend to help investors and founders building leadership teams understand what qualities are needed across the team to achieve a high-performing team dynamic.

The 14 qualities we list below were discovered during our research with UCL and The Work Psychology Group, looking at every PE-backed exit across Europe since 2010. These are the behaviours most likely to exist within a private-equity backed leadership team that delivers upper-quartile returns after exit.

From this research, we have built a behavioural assessment model called PACE (Pragmatism, Agility, Curiosity, Execution), which we use to help private equity investors and founders build high performing leadership teams for high-growth companies.

In our leadership qualities list below, we reveal exactly what qualities (or behaviours) are necessary for a high performing team.

Our top 14 leadership qualities list

Following the PACE model, we have grouped our list of behaviours under Pragmatism, Agility, Curiosity and Execution. Each of these categories has been matched to leaders on high performing teams. While it’s unlikely that individuals will possess all 14 of the behaviours, what matters is that they are present in the team.

Even more important is that the team works well together. Behavioural complementarity is another aspect of the PACE model. So, even if an individual scores low on a behaviour, if they complement well with someone who scores highly, the team dynamic is still going to perform well. 

To learn more about complementarity or if you’re just curious about your leadership qualities, take the PACE test and get a full write up for free.

But now, here are the 14 top leadership qualities for successful senior leaders in private equity-backed portfolio companies.

Pragmatism-based leadership qualities

Highly Pragmatic leaders believe in the power of their own will to achieve their goals, and that with a good plan they can perform effectively no matter the circumstances to succeed. They do not tend to be ruffled by setbacks or self doubt and are able to adapt their approach to more efficiently achieve their goals. They are also generally optimistic about their capacity to achieve and are willing to put aside other desires in order to devote themselves to the success of the plan. 

Pragmatism can be broken down into the following behaviours: 

1. Practical

To be practical is to be willing to adapt to the requirements of a challenge in order to overcome it, and the willingness to put aside any other desires which might impede performance in other members of the team, such as the desire to do a task in a specific way for personal reasons. Practical people are also likely to be less sentimental than others; more of a realist in their approach.  

Practical individuals apply various techniques to find the best solution to a problem, act quickly and confidently, they are more likely to create change across multiple areas of the business, and are more tactical in their approach.

2. Proactive

Proactive leaders are highly effective at changing and creating the environment they want to work in; they believe that they can perform well and make a difference. They have a very high willpower and self-belief, and are relatively free from the pressures of a situation. Proactive individuals identify opportunities and act on them; they show initiative, take action and persevere until they bring about meaningful change. They also like to be involved in many facets of the business.

3. Optimism 

Optimists are hopeful and confident about future success. They deal effectively with adversity or difficult situations, are rarely discouraged and engage positively with others on the team. Optimistic leaders are focused on solutions more than problems.

4. Personal agency

Leaders with high personal agency believe they can control their motivations, have power over their own behaviour in order to perform effectively when the task demands it. In other words, an individual who believes (and expects) that through their own actions they can achieve their goals.


Agility-based leadership qualities 

Highly Agile leaders are likely to be curious and flexible. They take their time figuring out new situations and what they think about them, and so are generally open minded individuals. With a growth mindset to their own competencies, they have a positive attitude towards failure, never believing they are not up to the job, but rather that they can learn from their mistakes and become more competent at the task at hand. This leads to a view of their abilities as fluid, and ever-changing, and so take a generally experimental attitude to new situations and tasks. 

Agility can be broken down into the following behaviours:

1. Open

Open leaders have a high degree of imagination, creativity and experimentation and a deep appreciation for art and beauty. The attitude of open individuals is to wonder at the world at large and the individuals within it, but also that there is always more to discover of themselves and their competencies. 

Being more adaptable, they are also willing to take on unfamiliar challenges, and tend towards learning and exploring rather than focusing on limitations. For example, an open leader will ask ‘what can this offer’ rather than ‘what might be the risks with this’. As such, open leaders tend to be early adopters of new ideas or technologies.

2. Development

Also called a growth mindset, leaders who score high on development see both success and failure as part of an indefinite process. They feel able to improve their abilities via their own effort, and so are likely to be willing to take on more unfamiliar tasks. This mindset works well with the open sub-behaviour, as they also have a general willingness to learn and improve their competencies.

A development-focused leader takes on challenges without fear and treats failures as an opportunity to grow. They adjust to new conditions, learn from their mistakes and welcome feedback and criticism.

Curiosity-based leadership qualities

Highly Curious individuals are likely to prefer to approach problems by considering them in the abstract, viewing them from the vantage point of the ‘realm of possibilities’. They are likely to experiment with several different perspectives on a matter before altering and improving a framework or process. They are likely to be comfortable operating in a completely new way so long as they see it as an improvement on the previous way of working. 

They find their way through hunches when confronted with uncertainty; and they are adaptable in their ways of thinking when they encounter new information. They want to know how things work and why others think what they think so they can develop their own worldview.

Curiosity can be broken down into the following behaviours:

1. Intuitive

Intuitive refers to a thinking style that pays most attention to the meaning and patterns of information, evaluating problems primarily in terms of ‘possibilities’ as opposed to ‘actualities’. Intuitive leaders like to work with symbols, archetypes and abstract theories, and would rather learn by thinking a problem through than by hands-on experience. They make decisions and make sense of problems through hunches, impressions and patterns, as opposed to facts and details. 

An Intuitive thinker can make connections between multiple facets in business that might not be obviously connected. They detect trends, are able to read between the lines and base their decisions on abstract analysis and future opportunities.

2. Disrupter

A disrupter leader prefers to instigate big changes in their environment, often altering the very framework they were previously working in to invent a new one. This behaviour relates to Intuitive because disrupters also prefer to approach a problem from the ‘realm of possibilities' and create solutions in the abstract. And so, their divergent perspective is more likely to land on completely new solutions to the problem. 

They tend to ignore the current or previous framework completely, developing new methods with the end goal in mind rather than building on existing ones. 

3. Comfort with ambiguity 

Being comfortable with ambiguity in problem solving, involves the tolerance of unfamiliarity, incongruence and uncertainty in the process of problem solving. This relates to Intuitive, which thinks in possibilities over actualities, which implies that there is a period of uncertainty between grasping the pattern and explaining the solution in detail. This requires being comfortable with ambiguity.

Leaders with this behaviour work well in new and uncertain situations, are adaptable when the objectives are unclear and have the ability to learn from unpredictable times and environments.

4. Divergent Thinking

This is the ability to take an idea or concept and apply it to different types of situations. It complements the Intuitive behaviour, as Divergent Thinkers can make links across several areas of the business that may not be immediately obvious to others. They usually have many original ideas and are particularly helpful in planning phases where they can demonstrate their flexibility of thought. They are very adept at brainstorming as they see the process as open-ended, will continue even if there is no solution in sight and so are likely to come across new ways of working by exploring many possibilities including those that transform the framework.

Execution-based leadership qualities

High Executors prefer to take on tasks themselves because of an intrinsic motivation to work hard and to achieve ambitious goals and a strong sense of personal responsibility for the success or failure of their plans. They do not seek to avoid conflict, but do what they think is the right thing to do regardless of what others may think of them. They prefer to be in control of their process, meaning they are suited to leading by example or giving out precise directives, rather than delegating responsibility.

Execution can be broken down into the following behaviours:

1. Work oriented

Work orientation is about how much someone views work as valuable in its own right – i.e. the work as its own reward. Work oriented leaders focus on getting things done, and are willing to put in a lot of effort to complete the tasks they set for themselves, even in the absence of plans or logical next steps. They have a desire to do a job well, and so are highly focused on execution. They tend to strive for independence and self-reliance.

2. Outcome Motivated

Outcome motivated people have a desire to accomplish something difficult, simply for the challenge itself. These leaders want to control their own work, and have a high degree of initiative. 

3. Internal Control

Those with a high level of Internal Control believe they are in control of their own life and see themselves as the source of their success. In working hard and achieving lofty goals, they feel they can own their own successes. They have high aspirations, respond well to challenges and are task-oriented.

4. Challenging Behaviour

As work oriented, internally controlled and outcome motivated people, if they are going to be this self-directed, then they need to be comfortable going against the grain and even coming into conflict with others. Execution-focused leaders will challenge others in their thinking and points of view in order to solve problems. They will come across as rebellious, independent minded, headstrong and outspoken, will actively challenge authority and readily take risks to achieve their goals. 

Behavioural complementarity is key

Understanding individual leadership qualities is important for potential leaders to gain self-awareness and a path to senior leadership. However, we know that it is far more important for the success of a business to get the diversity and balance of a leadership team right than it is to hire talented individuals. The dynamic needs to be considered fully or else the team could fall into dysfunction or group think and it will never reach the high performance required to achieve the goals of the value creation plan.

The interplay between all of these behaviours is complex and multifaceted and takes more than a blog article to explain fully. PACE was developed by leading psychologists at UCL with the team at Leadership Dynamics. To learn more about how PACE works you can take the test and get a detailed summary of your behavioural profile, or a member of the team can talk you through it and explain how it can be applied to your leadership teams.

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