Why do operating partners hold CROs to a higher bar now?
Bain & Company's Global Private Equity Report 2026 sums up the shift as "12 is the new 5." In its illustrative US example, a deal that needed about 5% annual EBITDA growth in 2015 to return 2.5x over five years now needs closer to 10% to 12%. Bain notes the assumptions will vary. More of the return now rides on earnings growth, and the commercial team carries much of it.
Sponsors and management can read the same plan differently. AlixPartners surveyed 427 respondents in 2026, 174 private equity leaders and 253 portfolio company executives. Investors placed significantly greater emphasis on top-line growth. Portfolio executives were more focused on margin management. In a 2020 release that gave no sample size, Gartner reported that only 45% of sales leaders and sellers had high confidence in their organization's forecasting accuracy. A CRO who closes these gaps earns room to run.
What should a CRO ask about the value creation plan?
Six questions, and one that sits under all of them.
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What does our value creation plan assume about revenue, and do I believe it?
The value creation plan is the sponsor's thesis in numbers, and the revenue line is yours to deliver. Find the assumptions under it, such as price on renewals, new agreements, cross-sell into acquired customers or new branches. Listen for which ones trace back to something your team has already done and which ones were modeled before you arrived. If you doubt a line, say so early and bring your reasons.
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How early do I tell the sponsor when the number moves?
The operating partner plans around your forecast, and their own reporting inside the firm rests on it. A forecast you lower early gives them time to adjust. One that drops late lands as a surprise, and the surprise costs more trust than the miss. When you feel the urge to wait for one more deal to land, treat that urge as the signal to tell them.
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Can I show why the forecast is what it is, deal by deal?
A forecast is a set of claims about what customers will do. The operating partner wants to see each claim and the evidence behind it. Listen for whether your commit rests on things buyers have done, such as an approved budget or a signed scope, or on how a seller feels about the account. A number you can defend line by line buys more patience than a number that happens to land.
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What does the operating partner read first each month?
Ask them directly. The answer tells you what they worry about, and it may be a page you spend little time on. Some start with the change in the forecast since last month, and others start with backlog or renewals. Listen for the one measure they check before anything else, and know it cold before the report goes out.
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Which growth levers are proven, and which are still bets?
Every plan mixes proven levers with bets. A renewal price increase that held last year is proven, and a new vertical stays a bet until it produces signed agreements. Operating partners trust a CRO who labels each one honestly and names when each bet will be judged. Listen for any lever carrying proven-sized numbers on bet-sized evidence.
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Would the number hold if I stepped away for a month?
Predictability that rests on one person is fragile, and the sponsor is backing a team. A good operating partner looks past the CRO to the managers. Listen for whether each manager can explain their part of the forecast in their own words, and whether their read matches yours.
"If the operating partner asked today, what would I want them to already know?"
This question sorts the rest. Name the item you would least want them to hear from someone else first. Listen for the issue you have been holding until it is fixed. That one goes to them today.
How can a CRO tell if the operating partner trusts them?
Good signs
- The operating partner hears about a forecast change from you before it shows up in the monthly report.
- You can name every deal in the commit and what the customer has done to earn its place.
- The plan labels proven levers and bets, and the sponsor agrees with the labels.
- Your managers explain the forecast the way you would.
- Bad news arrives with your read on the cause and what you are changing.
Warning signs
- The forecast holds flat for months and then drops late in the year.
- News waits until there is a fix to go with it.
- The commit is a total with no named deals behind it.
- Growth bets carry the same confidence as renewals in the forecast.
- Nobody on the commercial team can explain where a revenue assumption in the plan came from.
Case study Fictitious numbers
A PE-backed commercial facility services company runs 24 sellers across four branches. Its value creation plan has revenue growing from $60 million to $66 million this year. Price increases on renewing agreements are planned to add $2 million. New agreements are planned to add $4 million.
At the end of month five, the CRO reviews the bids behind the new-agreement line. Renewal pricing is holding and tracks to the full $2 million. Two large bids have moved. Both customers pushed their decisions into next year, and those bids carried $0.5 million and $0.4 million of this year's revenue. New agreements now track to $3.1 million.
- Price on renewing agreements (proven)
- New agreements
- Two bids moved to next year ($0.5M and $0.4M)
Month of the year · flagged in month 5 · 7 months left to plan
A gap flagged in month five gives the operating partner seven months to plan around it.
The CRO tells the operating partner that week. The revised view is $65.1 million against a $66 million plan, a $0.9 million gap. The CRO shows both bids, what each customer has done so far and what has to happen for each to close next year. The pricing lever is labeled proven. A new vertical the team opened this year is labeled a bet, with the date it will be judged. The operating partner now has seven months left in the year to plan around the gap.
FAQ
What does an operating partner do in private equity?
An operating partner is a professional at a private equity firm, often a former executive, who helps portfolio companies improve operations and results. With a CRO, the work centers on the revenue plan. They test the assumptions behind it and watch how the forecast moves over time. The strongest working relationships treat the operating partner as a peer with a long memory for patterns.
Do private equity firms care more about revenue growth or cost cutting?
The research leans toward growth. In a 2015 working paper, Gompers, Kaplan and Mukharlyamov surveyed 79 private equity investors with combined assets under management of over $750 billion. Those investors expected to add value with more emphasis on growth than on cost reduction. AlixPartners' 2026 survey found investors place significantly greater emphasis on top-line growth than portfolio executives do. Cost discipline still matters. Growth is where the CRO carries the plan.
What skills matter most for executives in PE-backed companies?
Execution skills stand out in the research. Kaplan, Klebanov and Sorensen studied CEO candidates in buyout and venture deals, using ghSMART & Company assessments that rated each candidate on more than thirty abilities. Execution skills tracked success more closely than team-related skills did. The paper first appeared in 2008 and was published in The Journal of Finance in 2012. It studied CEOs, so treat it as a signal for CROs.
How should a CRO tell the sponsor the forecast is going to miss?
Bring it early and bring the evidence. An operating partner reads a miss through the deals and renewals behind it and through what the customers did. Own the number and say what you are changing. Operating partners have seen plenty of misses. The way a CRO reports one tells them more than the miss itself.
Sources
- Welcome to a New Era: Global Private Equity Report 2026, Bain & Company, 22 Feb 2026 checked 9 Oct 2026
- AlixPartners 11th Annual Private Equity Leadership Survey, 25 Mar 2026 checked 9 Oct 2026
- Gartner Says Less Than 50% of Sales Leaders and Sellers Have High Confidence in Forecasting Accuracy, 12 Feb 2020 checked 9 Oct 2026
- What Do Private Equity Firms Say They Do? Gompers, Kaplan and Mukharlyamov, NBER Working Paper 21133, 2015 checked 9 Oct 2026
- Which CEO Characteristics and Abilities Matter? Kaplan, Klebanov and Sorensen, NBER Working Paper 14195, 2008 checked 9 Oct 2026