Private equity is a world where the pace is relentless, expectations are sky-high, and the margin for error is slim. Leaders are often chosen for one thing: their ability to deliver fast. Hit the ground running. Drive transformation. Create value within a specific timeline.
But here’s the reality, operational brilliance alone doesn’t guarantee success. Without emotional intelligence (EI) and empathy, leaders can win the quarter and lose the company. In this article @Lubna Haq, highlights the shift importance of EI in PE leaders.
We’re even seeing this shift inside the most hard-driving PE houses
Even within traditionally hard-driving PE firms, this shift is becoming evident. Kohlberg Kravis Roberts & Co (KKR), one of the world’s most influential investment firms, long known for its relentless, numbers-first culture, now publicly acknowledges empathy as a performance factor. Pete Stavros, KKR’s Co-Head of Global PE, has stated that CEO empathy can directly influence outcomes. At the 2025 Milken Institute Global Conference, co-founders George Roberts and Henry Kravis emphasized to young investors that while analytical skills are essential, emotional intelligence, relationship-building, and resilience are what distinguish exceptional leaders.
This lesson has been learned, sometimes painfully, across many portfolio companies.
Consider the case of a newly appointed CEO at a PE-backed manufacturing firm. Within six months, he slashed costs and doubled output, impressing the board. But internally, morale plummeted, staff turnover surged, and customer satisfaction declined. Within 18 months, the CEO and most of his leadership team were gone.
Contrast that with a retail chain CEO, also backed by PE, who faced a daunting supply chain overhaul. Rather than relying solely on top down directives, she engaged with frontline staff, listened to concerns, and communicated the purpose behind the changes. She celebrated small wins and fostered a sense of shared progress. The result? The transformation was completed ahead of schedule, staff retention improved, and revenue exceeded expectations.
PE culture is evolving
Even at the firm level, cultural shifts are underway. KKR’s European co-CEOs have declared that “the days of the lone wolf dealmaker are dead.” They’ve advocated for lighter workloads in August to prevent burnout and encourage creativity signaling that sustainable performance stems from supporting people, not just pushing them harder.
In PE-backed businesses, leadership success is defined not only by what is achieved, but by how it is achieved. The most effective leaders communicate with clarity and compassion, know when to push and when to pause, and foster psychological safety in high-pressure environments. They understand that fear stifles innovation and erodes trust.
Ignoring EI carries real risks. Leaders lacking emotional intelligence may deliver short term gains but leave behind burnout, attrition, and mistrust. The business begins to run on fumes.
So, there are five key things that PE leaders should really do to be more effective. Be present and attentive to what is going on day to day by walking around and talking to people in this way you get a real sense of people’s appetite for changea. Us every opportunity to explain the ‘why’ in lots of different ways.
Five EI Power Moves for PE Leaders
To lead effectively, it’s essential to walk the floor. Being present where the work happens and listening without agenda builds trust and insight. Explaining the “why” behind decisions fosters buy-in more powerfully than authority alone. Leaders must balance pace with pulse, driving change while staying attuned to the organisation’s capacity to absorb it. Spotting early signs of burnout is critical, as attrition often begins quietly and can be addressed before it appears in the metrics. And finally, celebrating progress, not just outcomes, helps sustain momentum, especially in high-pressure environments where recognition fuels resilience.
Conclusion
PE firms invest in potential and that potential is unlocked not just through strategy and systems, but through people. The leaders worth backing are commercially sharp, emotionally intelligent, and culturally attuned. They deliver results without losing the room. That’s the true competitive edge.